A cost-benefit analysis:
A) determines whether potential actions will have a net positive or net negative effect.
B) forces managers to merely look at the immediate implications of their actions.
C) is done to arrive at a point where costs and revenues become equal.
D) is a statistical process that helps determine relationships among several variables.

Question

Quizplus · Accepted Answer

A cost-benefit analysis is done to determine whether potential actions will have a net positive or net negative effect. It compares the costs of taking a certain action with the expected benefits that will be gained from it. By doing so, it helps managers make informed decisions about whether or not to go ahead with a particular action.

A Cost-Benefit Analysis