Let's say that ava is at a restaurant that offers free refills, thus the additional cost of a third soda glass is nothing. The cost-benefit analysis dictates that ava should have a third Coke if the additional benefit is beneficial.
What Is the Cost-Benefit Principle?
Users shouldn't be required to pay more than is necessary to provide financial information in financial statements, according to the cost-benefit principle.
Explanation of the Cost-Benefit Principle
Businesses employ the cost-benefit analysis to assess if the benefits of a specific activity outweigh its expenses.
Businesses should avoid taking actions if the gain is not at least equal to the expense.
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