Reference no: EM133378774

Question: A cost-benefit analysis can be described as the procedure used to compare the forecasted or approximated benefits and costs related to a project or decision to establish whether it provides sense based on a business perspective (Zerbe & Scott, 2018). Fundamentally, the cost-benefit analysis is an accounting framework employed to assess the financial outcomes of proclamations. In my current workplace, one application of the cost-benefit analysis is leasing and buying the current business premises. Over the last few years, the management team has been engaged in deliberations to decide whether to lease or purchase the current premises occupied by the company. For the larger part, despite each being practical, deciding which makes more financial sense has proven to be an uphill task. An assumption within the project where the data was difficult to obtain was which between leasing and purchasing would offer more financial benefits in the long run. To develop a reasonable assumption for the projects economics, there was a need to forecast market trends, especially when it comes to unpredictable property values. Essentially, an analysis was conducted based on what the real estate industry foresees about the price of property and lease rates. Analyzing the potential costs saved from either leasing or purchasing the property could have led to a better decision. For instance, it would have been important to use financial data to establish whether purchasing the property had the potential to help save on costs in the future, giving room for such finances to advance production and efficiency for the company.