The Economic Analysis Method Used When There Are Alternative Ways

question 9

Multiple Choice

The economic analysis method used when there are alternative ways of attaining a single type of outcome is:

• A) Cost-utility analysis
• B) Cost-minimization analysis
• C) Cost-effectiveness analysis
• D) Cost-consequence analysis

Analyze the effects of sales mix changes on the overall break-even point for a company.

Construct and analyze contribution format income statements under different scenarios.

Determine the impact of sales volume changes on net operating income.

Estimate the changes in net operating income as a result of pricing, cost, and advertising decisions.

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Definitions:

Liquidity

The ease with which an asset, or security, can be converted into ready cash without affecting its market price.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity.

Financial Ratios

Metrics derived from financial statements that are used to evaluate a company's performance and financial health.

Total Sales

The aggregate revenue a company generates from the sale of goods or services before any deductions are made.