Use the Following Graph of the Cost/benefit Model for Risk

question 90

Multiple Choice

Use the following graph of the cost/benefit model for risk analysis to answer the next five questions.

-What does (1) represent?

• A) Total cost
• B) Loss area
• C) Cost of controls
• D) Level of assurance
• E) Optimal point of reasonable assurance A

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Definitions:

Margin Of Safety Ratio

A financial metric that measures the difference between actual or projected sales and the break-even point.

Margin Of Safety

The difference between actual or expected sales and sales at the break-even point.

Actual

Pertaining to the real, recorded, or true values or outcomes, as opposed to estimated, planned, or theoretical figures.

Expected

Referring to what is considered likely or anticipated in terms of events, values, or outcomes.