Cost-Benefit Analysis
A cost-benefit analysis is a common type of business decision-making tool that involves quantitative reasoning. In a cost benefit analysis, managers decide the best course of action out of two or more possible courses of action by attributing values to the expected benefits of different courses of action and comparing those values. For example, if a company is trying to decide whether to spend its money on launching a new product or spending more toward advertising current products, it might conduct a cost-benefit analysis to estimate how much profit it could expect from each course of action and then choose the course that is expected to produce more profit.
Break-Even Analysis
A break-even analysis is a quantitative inquiry businesses make to determine how many units of a certain product they must sell in order to break even. Breaking even means that a company covers all of its costs but does not make a profit. A company must at least meet the break-even point to avoid losing money.