ECONOMICS
COST BENEFIT ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Benefit-cost analysis
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optional analysis
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profit-margin analysis
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trade-off analysis
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Detailed explanation-1: -A cost-benefit analysis is the process used to measure the benefits of a decision or taking action minus the costs associated with taking that action. A cost-benefit analysis involves measurable financial metrics such as revenue earned or costs saved as a result of the decision to pursue a project.
Detailed explanation-2: -Performing cost benefit analysis allows companies to measure the benefits of a decision (benefits of taking action minus the costs associated with taking that action). It involves measurable financial metrics such as revenue earned, and costs saved as a result of the decision to pursue a project.
Detailed explanation-3: -Net Present Value and Benefit-Cost Ratio are the two most common methods of doing a cost-benefit analysis. The NPV model chooses the project with the highest NPV. The benefit-cost ratio model chooses the project with the highest benefit-cost ratio.