American Institute of Certified Planners (AICP) Practice Exam

Which analysis presents the costs and revenues associated with specific forms of growth?

1. Cost Revenue Analysis

2. SWOT Analysis

3. Net Present Value Analysis

4. Return on Investment

The correct answer is: Cost Revenue Analysis

The correct choice focuses on Cost Revenue Analysis, which is a financial tool used to understand the economic implications of various types of growth within a given context. This analysis evaluates both the costs required to support growth initiatives and the potential revenues generated from those initiatives. By examining the relationship between costs and revenues, planners can make more informed decisions about which growth strategies present the best financial outcomes. In practical terms, Cost Revenue Analysis provides planners with insights that help them assess the viability of different projects or developments. It enables them to weigh the financial investments needed against the anticipated returns, ultimately guiding strategic planning efforts. Other options, while valuable in their own right, do not specifically address the relationship between costs and revenues in the context of growth. SWOT Analysis focuses on strengths, weaknesses, opportunities, and threats, offering a broader strategic framework rather than a financial analysis. Net Present Value Analysis is a technique used to determine the value of an investment by calculating the present value of future cash flows, but it does not specifically isolate costs and revenues associated with various forms of growth. Finally, Return on Investment measures the profitability of an investment but lacks the comprehensive overview of costs versus revenues related directly to growth scenarios presented in Cost Revenue Analysis.