Cost Benefit Analysis Lesson Plan.pdf

Cost Benefit Analysis Lesson Plan.pdf - Whats It Worth...

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What’s “It” Worth? Lesson Background Dr. Julie Heath’s Cincinnati Enquirer article, “Stadiums: Benefits, Costs and the “It” Factor” illustrates one of the common problems facing decision makers – be they individuals, business owners, voters, or investors. If you clearly know the costs and benefits of the alternatives, you can usually make a “good” decision. The problem is that costs and benefits are sometimes hard to pin down. If it is just money – it seems easy. Is a large soft drink at McDonalds worth a dollar? How thirsty are you? How much do you enjoy a soft drink? How much time and trouble will it take to get to the McDonalds? Deciding to spend a dollar is pretty easy – unless you don’t have a dollar. The other stuff, the benefits, may be a little more difficult, unless, of course, it is 100 degrees outside. Then again, it is only a dollar. As Dr. Heath suggests, the benefit may be hard to measure and compare when they are something like “civic pride” or bragging rights – “our stadium is better than yours – nah, nah, nah, nah, nah, nah!” How much is a state-of-the-art stadium and a winning football team worth to a potential executive of Procter and Gamble? The value of a benefit is a personal thing. Will you give up being close to the beach for $50,000 more in income? Is the bigger house in the country worth the drive into the city on I-75? Are there people who only want to live and work in a city that has at least two professional sports teams (with updated stadiums)? Key Vocabulary Terms Benefit : Monetary or non-monetary gain received because of an action taken or a decision made.
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