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|Title:||Cost-volume-profit analysis and the value of information|
|Authors:||Richardson, A. William|
Wesolowsky, George O.
McMaster University, Faculty of Business
|Series/Report no.:||Research and working paper series (McMaster University. Faculty of Business)|
|Abstract:||<p>In this paper, a new view point on cost-volume-profit analysis is presented. In contrast to the usual concern with the actual accept/reject decision, it is pointed out that, first, a decision must be made on the adequacy of the input data for use with the decision model. The use of the concept of the expected value of perfect information in this decision is described. In addition, the sensitivity of the decision variables to uncertainty in the input variables is investigated. Equations to be used for these two purposes are derived and illustrated for two types of probability distributions of the input data, the normal and lognormal distributions.</p>|
|Description:||<p>28, 3 p. : ; Bibliography: p. 13. ; "November, 1977."</p> <p>The authors wish to express their gratitude to Dr. L. G. Eckel for reading several drafts of the manuscripts and to Drs. N. Archer and z. Drezner for assistance with some of the mathematics.</p>|
|Appears in Collections:||DeGroote School of Business Working Paper Series|
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