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Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives.It is used to determine options which provide the best approach to achieving benefits while preserving savings in, for example, transactions, activities, and functional business requirements. [1]
Economies of scope is an economic theory stating that average total cost of production decrease as a result of increasing the number of different goods produced. [ 2] For example, a gas station that sells gasoline can sell soda, milk, baked goods, etc. through their customer service representatives and thus gasoline companies achieve economies ...
Cost reduction is the process used by organisations aiming to reduce their costs and increase their profits, or to accommodate reduced income. Depending on a company’s services or products, the strategies can vary. Every decision in the product development process affects cost: design is typically considered to account for 70–80% of the ...
Cost breakdown analysis. Components of price. Image according to Garrett (2008), figure 4-1, p.65. In business economics cost breakdown analysis is a method of cost analysis, which itemizes the cost of a certain product or service into its various components, the so-called cost drivers. The cost breakdown analysis is a popular cost reduction ...
Efficient energy use, or energy efficiency, is the process of reducing the amount of energy required to provide products and services. There are many technologies and methods available that are more energy efficient than conventional systems. For example, insulating a building allows it to use less heating and cooling energy while still ...
e. In economics, deflation is a decrease in the general price level of goods and services. [ 1] Deflation occurs when the inflation rate falls below 0% (a negative inflation rate ). Inflation reduces the value of currency over time, but deflation increases it. This allows more goods and services to be bought than before with the same amount of ...
Assuming he can invest half of his tax savings each month in a fund tied to the S&P 500, our in-the-money minstrel could wind up with around $104,000 in extra cash after a decade, based on the ...
Equivalent annual cost. In finance, the equivalent annual cost ( EAC) is the cost per year of owning and operating an asset over its entire lifespan. It is calculated by dividing the negative NPV of a project by the "present value of annuity factor": , where. where r is the annual interest rate and. t is the number of years.