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Question 19 - BAPv5 discussion

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A business case contains the following in its management summary:

'The recommended option meets the new regulatory requirements. It will ensure our products remain in the marketplace and be the first to receive compliance certification, which will enhance our reputation as the market leader

New business policies and processes will be introduced, which may temporarily reduce productivity. The action plan will be communicated to all staff at the next monthly meeting?

Which TWO categories of costs and benefits are described in this extract?

A.
Tangible costs
Answers
A.
Tangible costs
B.
Intangible costs.
Answers
B.
Intangible costs.
C.
Tangible benefits
Answers
C.
Tangible benefits
D.
Intangible benefits
Answers
D.
Intangible benefits
E.
Irregular costs
Answers
E.
Irregular costs
Suggested answer: B, D

Explanation:

A cost is an expenditure or sacrifice incurred or expected to be incurred as a result of a business change. A benefit is an advantage or improvement that is gained or expected to be gained as a result of a business change. Costs and benefits can be classified as tangible or intangible, depending on whether they can be measured in monetary terms or not. Therefore, options B and D are correct answers, as they describe intangible costs and benefits that are not easily quantified or valued. Intangible costs include the temporary reduction in productivity due to the introduction of new business policies and processes. Intangible benefits include the enhancement of the company's reputation as the market leader due to being the first to receive compliance certification. Option A is not a correct answer, as tangible costs are not described in the extract. Tangible costs are those that can be measured in monetary terms, such as the cost of purchasing new equipment or hiring new staff. Option C is not a correct answer, as tangible benefits are not described in the extract. Tangible benefits are those that can be measured in monetary terms, such as the increase in revenue or decrease in expenses.

asked 16/09/2024
Crystal Eagle
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