In a cost-benefit approach, managers should spend resources if the ________.
A) marginal costs to the company exceed the marginal benefits
B) expected benefits to the company exceed the expected costs
C) marginal costs to the company equal the marginal benefits
D) expected benefits to the company equal the expected costs

Question

Quizplus · Accepted Answer

In a cost-benefit approach, managers should spend resources only if the expected benefits to the company exceed the expected costs. This means that the decision is based on the balance between the potential gains and losses, rather than just the immediate cost of the investment. Choosing options A or C would mean that the company is not maximizing its benefits and might miss out on valuable opportunities, while option D would result in a break-even decision, which might not be worth pursuing. Therefore, B is the best choice.

In a Cost-Benefit Approach, Managers Should Spend Resources If the ________