When performing a benefit-cost analysis for multiple alternatives, calculate each B/C ratio, rank them, then pick the highest one. True or False?

Q: What is the Economic Value Added (EVA) method? Provide a definition, state a formula, and define all…

A: Economic Value Added (EVA): EVA also called economic profit is a measure of the financial…

Q: Label each of the following statements as either true (“T”) or false (“F”). An opportunity cost is…

A: Answer:   True.

Q: Resale va to be in ather a. Using benefit-cost ratio analysis and and 8% MARR, determine which…

A: For IRR, assumption of rate of return @ 6% & 10% is taken. And then interpolation is used to…

Q: In economic analysis we want to minimize the difference: (Benefits - Costs).

A: While conducting an economic analysis (cost-benefit analysis) the benefits must weigh greater than…

Q: What are the advantages and limitations of ratio analysis? Identify three advantage and three…

A: Ratio Analysis is the use of accounting ratios to forecast or review the financial performance of a…

Q: Besides the dollar cost, what other costs should you consider when comparing alternative solutions…

A: A company will incur various costs to earn revenue. The costs can be either direct or indirect costs…

Q: Which of the following is NOT true of regression techniques for estimating costs?

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: A quantitative analysis enables a decision maker to put a “price” on the sum total of the…

A: Definition: Quantitative analysis: A quantitative analysis focuses on the factors in a decision…

Q: With the information given how do I calculate the current cost conversion?

A: Equivalent units of products concept came in to existence when some units are not fully completed at…

Q: What is the economic rationale for the cost approach? Under what conditions would the cost approach…

A: Answer: Economic rationale for cost approach: The cost approach means that the person who is…

Q: differential costs where you had to choose between two alternatives

A: Differential cost refers to the difference between the cost of two or more alternative options.  It…

Q: n be obtained from this rating?

A: Given: To analyse the cost classification with the benefits as follows,

Q: Distinguish between goal weights and historical weights in terms of how they are used to compute the…

A: Here Is The Answer:

Q: What do you mean when you say "fixed costs"? What's the point? Is it possible to have a combined…

A: Introduction: Costs are the costs that a company incurs when it is in operation. It includes the…

Q: When using the high-low method, should you base the high and low observations on the dependent…

A: Cost Function:Cost function represents the basic change comes in the total cost due to the change in…

Q: Describe the measure based on an index, known as the benefit-cost ratio?

A: A benefit-cost ratio (BCR) is a proportion used to summarize the general connection between the…

Q: What are the two components that can affect the contribution margin? Why is it important to…

A: The two components that can affect contribution margin: 1) Number of units sold. 2) Price / cost per…

Q: What are the important points to remember in preparing the breakeven point graph? The…

A: Break-even point is the point at which company neither earns profits nor incurs loss. Break-even…

Q: Describe three alternatives of cost-plus pricing methods?

A: Cost-plus pricing is a method in which the selling price is set by evaluating all variable costs a…

Q: How can we calculate the Total Present Cost for the Base Case and Alternative?

A: The question is based on the concept of calculation of cost benefit analysis of base case and…

Q: How is contribution margin calculated? What about contribution margin ratio? Aren’t they the same…

A: Subtracting the selling price per unit from the variable cost per unit yields the contribution…

Q: Why is an incremental analysis necessary when conducting a rate of return analysis for cost…

A: Incremental analysis considers only the relevant cash flows and it does not consider the…

Q: What is an outlier? List some possible causes of outliers. How should outliers be handled in cost…

A: Outlier: An outlier is a data point that falls far away from the other points in the scatter diagram…

Q: What is favorable variance? Give three examples?

A: Favorable Variance: Favorable variance is the variation in the actual and planned output which is…

Q: Beside the dollar cost, what other costs should you consider when comparing alternative solutions to…

A: There could be lot of factors which are to be considered while comparing alternative solutions to a…

Q: Which option would you choose using a 12% BCR and cost-benefit analysis? Decide what should be…

A: Benefit cost ratio is a part of the cost benefit analysis. This ratio helps in the decision making…

Q: Discuss the FOUR basic steps in benefit-cost analysis, which aspect of benefit-cost analysis would…

A: Cost-benefit analysis or CBA is referred to as the prices, which helps in measuring the benefits of…

Q: When using a benefit-cost ratio (B/C) analysis to evaluate multiple alternatives, which of the…

A: hen using a benefit-cost ratio (B/C) analysis to evaluate multiple alternatives,the approaches…

Q: In evaluating three mutually exclusive alternatives by the B/C method, the alternatives were ranked…

A: B/C is the ratio of benefit to cost ratio. This helps to identify the projects which is economically…

Q: Write the equation for the Contribution margin?

A: Cost volume profit analysis: CVP analysis established the relation between cost, volume, and profit…

Q: Which of the following items would be useful to management in deciding whether to investigate the…

A: Standard costs are the budgeted costs related with the production, manufacturing and selling of…

Q: Perform profitability analysis for the two quotas

A: Profitability analysis is a type of analysis or a financial ratio that helps in assessing the profit…

Q: Define the term an incremental benefit-cost ratio?

A: The incremental cost is the additional cost incurred for producing an additional one unit of a…

Q: Complete the sentence: In a modified B/C (Benefit/Cost) Ratio... Select one: o a.disbenefits are put…

A: Answer: The correct option is option (c). The M&O costs are put in the numerator.

Q: Calculate the average rate of return, and conclude your results with your comments about the ARR for…

A: Calculation of Accounting Rate of Return (ARR)  Year                             Net Cash Flow 1st…

Q: In using least-squares to estimate the variable and the fixed components in a mixed cost, these two…

A: Least Square method (Linear regression) is a very accurate method for dividing cost into variable…

Q: Express the two ways of contribution margin?

A: Contribution margin is the difference between the sales revenue and the variable costs.

Q: Indicate whether the item below is used as key performance indicators for the areas of (A)…

A: The cost variance is calculated by the difference between the actual cost and the budget cost. Cost…

Q: d P/S, which company will you buy? Show computations to support your decision.

A: In the year 2020, P/E = Price/EPS for 2020 P/B =  Price/Book value per share P/S = Price/Sales per…

Q: Which of the following statements is true? Select one: one: a. The most complex of the cost…

A: High-low method: It is the method of estimating the variable cost per unit and the fixed costs by…

Q: Your accountant has provided you with the table below comparing three alternatives using…

A: Formula:                PV Factor= 11+rn

Q: Least-squares regression is a statistical method for identifying cost behavior. True or False True…

A: According to the given question, we are required to give the answer that the statement is true or…

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.