Which of the following best explains why market prices are useful to a financial manager when performing a cost-benefit analysis?
A)They can be used to determine how much an asset can be sold for.
B)They can be used to convert different services and commodities into equivalent cash values which can be compared.
C)They allow all commodities and services to be assigned a fixed and unchanging value.
D)They can be evaluated to determine whether the market in which the manager exchanges goods and services offers true value.
E)They can be used to determine the correct value for assets to be purchased.

Question

Quizplus · Accepted Answer

Market prices can be used to convert different services and commodities into equivalent cash values which can be compared, allowing financial managers to perform cost-benefit analysis. This helps in decision-making about the allocation of resources based on their relative costs and benefits.

Which of the Following Best Explains Why Market Prices Are