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Understanding & Using Cost-Benefit Analysis

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which of the following is a disadvantage of cost-benefit analysis:

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1. Which costs are excluded from cost-benefit analysis?

2. What is the principle behind time value of money?

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About This Quiz & Worksheet

This worksheet and quiz will explore critical information about economic cost-benefit analysis. Working with questions based on the disadvantages of cost-benefit analysis and the costs included in cost-benefit analysis will be required to pass the quiz.

Quiz & Worksheet Goals

You can use this quiz to check your knowledge of:

  • Excluded costs from cost-benefit analysis
  • Factors that are considered to determine if a project is accepted or not
  • Disadvantages of cost-benefit analysis
  • Purpose of cost-benefit analysis
  • Significance of time value of money

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related business lesson
  • Information recall - access the knowledge you've gained regarding the purpose of cost-benefit analysis
  • Knowledge application - use your knowledge to answer a question about the factors that are considered to determine if a project should be accepted

Additional Learning

More in-depth information about cost-benefit analysis can be found in the lesson titled Understanding & Using Cost-Benefit Analysis. Within the lesson, you will become proficient in the following objectives:

  • Identify the benefits and consequences of cost-benefit analysis
  • Recall the importance of budgeting
  • Explain all of the cost-benefit analysis steps
  • Explore the significance of stakeholders and identifying them
  • Distinguish the differences between sunk costs and opportunity costs
  • Know the formula that is used to calculate the present value
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