Economics Today and Tomorrow, Student Edition
1st Edition
ISBN: 9780078747663
Author: McGraw-Hill
Publisher: Glencoe/McGraw-Hill School Pub Co
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Question
Chapter 10.1, Problem 4R
To determine
To state: The profit rule for cost-benefit analysis.
Expert Solution & Answer
Answer to Problem 4R
The rule of profitability index is used in cost benefit analysis
Explanation of Solution
Profitability index is used in cost benefit analysis to evaluate whether the business is to be expanded or not, whether a project is to be accepted or not. It is calculated by dividing the revenues from the costs.
If the answer comes greater than 1, the project is accepted else the it is rejected.
Economics Concept Introduction
Introduction: Cost benefit analysis helps to choose a better option for a business by analyzing the benefit caused from a particular cost.
Chapter 10 Solutions
Economics Today and Tomorrow, Student Edition
Ch. 10.1 - Prob. 1RCh. 10.1 - Prob. 2RCh. 10.1 - Prob. 3RCh. 10.1 - Prob. 4RCh. 10.1 - Prob. 5RCh. 10.2 - Prob. 1RCh. 10.2 - Prob. 2RCh. 10.2 - Prob. 3RCh. 10.2 - Prob. 4RCh. 10.3 - Prob. 1R
Ch. 10.3 - Prob. 2RCh. 10.3 - Prob. 3RCh. 10.3 - Prob. 4RCh. 10.3 - Prob. 5RCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 4AACh. 10 - Prob. 5AACh. 10 - Prob. 6AACh. 10 - Prob. 7AACh. 10 - Prob. 8AACh. 10 - Prob. 9AACh. 10 - Prob. 10AACh. 10 - Prob. 11AACh. 10 - Prob. 12AACh. 10 - Prob. 13AACh. 10 - Prob. 14AACh. 10 - Prob. 15AACh. 10 - Prob. 16AACh. 10 - Prob. 17AACh. 10 - Prob. 18AACh. 10 - Prob. 19AACh. 10 - Prob. 20AACh. 10 - Prob. 21AACh. 10 - Prob. 22AA
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