How Do You Define Cost Benefit Analysis? Why Is Piracy So Prevalent?

Cost Benefit analysis means analyzing the pros and cons of each decision. It means calculating the opportunity cost of the alternative chosen for example, what could be the forgone profits and gains which can be obtained if the alternative is not chosen and what are the negative implications which can be caused by selecting the alternative.

Regarding piracy, piracy is prevalent because of presence of black market which steals the original product and sells the duplicate copies to the customers by making profits of millions and millions. Piracy is prevalent because customers want to buy the product at lower costs rather than the original product which is most of the times have high prices.

Analysis of the cost benefit is a term that only refers both to a formal discipline used to help appraise, or assess the case for a project or proposal, which itself is a process known as project appraisal and an informal to making decisions of any kind.

The process under these two definitions the process involves rather explicitly or implicitly, weighing the total expected cost against the total expected benefits of one of the more actions in order to choose the best or most profitable option.

Now talking about its process it involves monetary calculations of the initial and ongoing expense verses expected return. Constructing plausible measure of the cost and benefits of specific actions is often very difficult. In practice analysts try to estimate cost and benefits either by using survey methods or by drawing inferences from market behavior. For example, a manger may compare manufacturing and marketing expenses to projected sales for a proposed product, and only decide to produced it if he expects the eventually recoup the cost.

The privacy is so prevalent in CBA because of the accuracy problems the accuracy of the outcome of a cost benefit analysis is dependent on how accurately costs and benefits have been estimated.