Question

The concept of considering whether the savings or increased profits of a proposed change are greater than what is required to implement the change is called ______.

a) cost-benefit analysis

b) differential analysis

c) marginal analysis

d) opportunity cost analysis

Answer 1

Cost-benefit analysis is the concept of considering whether the savings or increased profits of a proposed change are greater than what is required to implement the change.

Step-by-step explanation:

The concept of considering whether the savings or increased profits of a proposed change are greater than what is required to implement the change is called cost-benefit analysis. Cost-benefit analysis is a decision-making process where the costs and benefits of a decision are compared to determine if the benefits outweigh the costs. For example, if a company is considering implementing a new technology system that will cost $10,000 to install but will result in increased profits of $20,000 per year, a cost-benefit analysis would compare the $10,000 cost to the $20,000 annual profit. If the profit is greater than the cost, then the change is considered beneficial.