How to answer Cost Benefit Analysis on question 6

anna_c97

Hi all, I recently took the level 4 Synoptic exam and failed with 63%. I did particularly badly in question 6 as it was focused on cost benefit analysis rather than SWOT which I hadn't expected as it hasn't come up in any of the past papers (i use the Osbourne textbook). If anyone has any advise on how to answer this question I would really appreciate it! Thanks

CornishPixie

As you are using Osborne, have a look at the tutorial Accounting systems and controls book. In my version, which I admit is a year old, there is a very clear explanation of CBA on pages 145-147 but it should be in your current version somewhere. And do not forget the social responsibility aspect, and ethical considerations - these are all very important and need to be included, particularly if you are asked to justify something. Don't forget to refer to the pre-release in every written question.

anna_c97

Hi, I have read pages 145-147 and I can see where you're coming from. I am unsure of how to complete a cost benefit analysis table, I have seen a simple one in the Osborne book however I cannot find a more complex example, do you have nay advice on this? I have the 2016 Osborne book. Thanks!!

CornishPixie

I don't have any other examples I'm afraid as the extra books I purchased (Kaplan and BPP) have all been sold on. But google it and you will be surprised how many examples there are out there. Also google net present value as pretty much the same.

You need to know how much introducing something will cost over a period of time against how much gain there will be in introducing that something. Don't forget the ethical values of the company, and the affect of any new technology on existing staff! Not all staff will be receptive to new technology as they may fear losing their jobs.

CornishPixie

Oh, just remembered, have a look at the AAT website within study support 'Managing Changes to accounting systems' (if its still there) as it had a nice example of cost benefit in use!

c4n4ries

Cost benefit analysis is very similar/if not the same to the Net Present Value calculation. I always find going on youtube helpful as there are often tutorials and videos where people walk through certain calculations