Some Critics of Cost-Benefit Analyses Point to the Monetary Value

question 27

Essay

Some critics of cost-benefit analyses point to the monetary value set on saving a human life, say, $8 million dollars, and ask: "Does that mean that if I pay $8 million dollars to someone (or to his heirs), I can kill them?" What misunderstanding of cost-benefit analyses does this comment reflect?

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services provided on credit.

Inventory

The total amount of goods or materials a company holds, meant for sale or production.

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.