Please respond to two of my classmates by using your own personal opinion and research. Replies must be in the 100-150 words. Please no plagiarism. The discussion questions were as followed:
- What is a Cost-Benefit Analysis (CBA) and how is this methodology utilized in public sector accounting? Cite examples to substantiate your rationale.
- When would a Cost-Benefit Evaluation (CBE) be more appropriate to use than a CBA? Please provide an example to highlight your discussion points.
Response 1:
According to San Jose State University a “Cost-Benefit Analysis (CBA) estimates and totals up the equivalent money value of the benefits and costs to the community of projects to establish whether they are worthwhile”. The projects costs being analyzed may include infrastructure improvements such as highways and bridges. Public sector accounting will use the cost-benefit analysis when making a bid on a project. It will be evaluated to determine if the cost of being the lowest bidder, with the cost of material, labor, and expenses will be worth the benefit of winning the job.
An example of the use of a cost-benefit evaluation was the use by the Australian government in 2000-2004. The evaluation was used to find ways to build the capacity for family and community opportunities. According to Rogers, Stevens (2008), “The Strategy was implemented by the Department of Family and Community Services and Indigenous Affairs (FaCSIA) and consisted of seven community-based funding initiatives, which provided funding and support for projects in the community, and five broader initiatives” (Rogers et al., 2008, p. 85).
Response 2:
Cost-benefit analysis is a system and a method by business to decided which way to go to begin operation. The mathematical system is used to detect and compare the cost to run a program with the necessities needed. Once that is done the organization can then use the information to see if there was a benefit it having such a program or an overhead cost to the plan. This is known to be a great resource for businesses to get a great start off.
A cost-benefit evaluation is more effective than a cost-benefit analysis. It allows the ability to see which is the better way to go and see the projected outcome.
A great example is my organization is planning to merge they are several others who would like us on board. After carefully looking a the budget plans and their fiscal year plan I was able to see that one particular organization stood out because they did well and still had funds from each program left over. Unlike all the others they were merging funds and or shifting from one to another to stay afloat.
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