CIMA BA2 · Chapter 1 · Question 4 of 12
A manager is considering commissioning a detailed market survey. The survey would cost $18,000 and is expected to improve a pricing decision so that profit rises by about $12,000. Which of the following is the most appropriate conclusion?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The survey should not be commissioned because the cost of the information exceeds the value it is expected to provide
Explanation
A key quality of good information is that its value should exceed the cost of obtaining it. Here the expected benefit of $12,000 is less than the cost of $18,000, so the survey would reduce value by $6,000. More or more accurate information is not automatically worthwhile.
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