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How does cost-benefit related to incremental analysis?

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The concept of "Cost-Benefit" permeates smart decision making and accounting principles. How does this concept relate to incremental analysis. Provide an example to prove your point.

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Solution Summary

This discussion is two paragraphs (216 words) and explains how incremental analysis and cost-benefit are similar and gives an example of a make-or-buy decisions. Qualitative factors are mentioned.

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Incremental analysis is the comparison of the incremental benefit with the incremental costs. If the incremental benefits exceed the incremental costs, the decision is usually to "go for it" (barring any qualitative factors that may override the economics such as safety or secrets). If the incremental costs ...

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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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