ECONOMICS
COST BENEFIT ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Econometrics
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Tabel Input-Output (IO)
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Data Envelopment Analysis (DEA)
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Analytical Hierarchy Process (AHP)
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Detailed explanation-1: -For standard CBA, the formula, the benefit/cost ratio, is fairly simple: Benefit/cost, simplified as b/c. While there are slightly more complex formulas, the benefit-cost ratio is essentially just taking into account all of the direct or indirect costs and benefits and seeing if one outweighs the other.
Detailed explanation-2: -Generally speaking, cost-benefit analysis involves tallying up all costs of a project or decision and subtracting that amount from the total projected benefits of the project or decision. (Sometimes, this value is represented as a ratio.)
Detailed explanation-3: -Cost-benefit analysis is a systematic method for quantifying and then comparing the total costs to the total expected rewards of undertaking a project or making an investment. If the benefits greatly outweigh the costs, the decision should go ahead; otherwise, it should probably not.
Detailed explanation-4: -The intangible benefits, sometimes also called “soft benefits”, are the profits ascribable to the improvement project that cannot be reported for formal accounting purposes. These benefits are not included in financial calculations because they are not monetary or are difficult to quantify and calculate.