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For what purpose is the Benefit-cost analysis commonly used?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter28: Antitrust And Regulation

Section: Chapter Questions

Problem 10E

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Question

For what purpose is the Benefit-cost analysis commonly used?

Expert Solution

Step 1

Benefit-cost analysis is an analysis process through which a firm or company analysis the decisions of investment and chooses the best proposal or alternative. The benefit-cost analysis can be used to a decision for single or for the multiple alternatives.

In the benefit-cost analysis, the organization determine and identify all costs and benefits that are associated with the decision or projects and then compare the benefits and costs using a discount rate to decide whether to undertake the decision or not.

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