Cost Benefit Analysis tast 2.docx - 1.Outline two methods for conducting cost-benefit analysis Cost Benefit Analysis Cost-benefit analysis(CBA is a

Cost Benefit Analysis tast 2.docx - 1.Outline two methods...

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1 .Outline two methods for conducting cost-benefit analysis. Cost Benefit Analysis Cost-benefit analysis (CBA) is a technique used to compare the total costs of a programme/project with its benefits, using a common metric (most commonly monetary units). This enables the calculation of the net cost or benefit associated with the programme. To provide a basis for comparing projects: With so many investment choices around, there has to be a basis for choosing the best alternative. Cost-benefit analysis is one the most apt to tools to pick through the available options. When the one out the two options seem more beneficial, the choice is simple. However, a problem arises when there are more than two alternatives to evaluate. The Cost-Benefit Analysis model helps businesses to rank the projects according to their order of merit and go for the most viable one. Evaluating Opportunity Cost: We know that the resources at our disposal are finite but investment opportunities are many. Cost-benefit analysis is a useful tool for comparing and selecting the best option. However, while choosing the most viable project, it is also imperative to be aware of the Opportunity Cost or the cost of the next best alternative foregone. It helps businesses to identify the benefits that could have arisen if the other option was chosen. Performing Sensitivity Analysis for the various real-life scenarios: Situations are not the same always and exact outcome cannot be predicted. The discount rate can be tested over a range. Sensitivity analysis can be instrumental in improving the credibility of a Cost-benefit analysis and is mainly used where there is ambiguity over the discount rate. The investigator may change the discount rate and the horizon value to test the sensitivity of the Cost-Benefit Analysis model.
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2. Describe two creativity theories and their application to workplace innovation. Creativity theories and their application to workplace innovation. Creativity is the mental and social process used to generate ideas, concepts and associations that lead to the exploitation of new ideas. Or to put it simply: innovation. Through the creative process, employees are tasked with exploring the profitable outcome of an existing or potential endeavor, which typically involves generating and applying alternative options to a company's products, services and procedures through the use of conscious or unconscious insight. Establishing a creative environment takes more than just turning your employees loose and giving them free reign in the hope they'll hit on something valuable. As with any other system, the process of creativity requires the proper framework to operate effectively, which also enables management to evaluate the profitability of the results.
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  • Summer '19
  • Jamshed Khan

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