ECONOMICS
COST BENEFIT ANALYSIS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Use of Price Assumptions (Market and Non-Market)
|
|
|
Source of Funding (Private and Government)
|
|
|
Nature of Goods (Private and Public)
|
|
|
Project Objectives (Commercial and Non-Commercial)
|
Detailed explanation-1: -What Is A Cost-Benefit Analysis? A cost-benefit analysis is the process of comparing the projected or estimated costs and benefits (or opportunities) associated with a project decision to determine whether it makes sense from a business perspective.
Detailed explanation-2: -A cost-benefit analysis involves measurable financial metrics such as revenue earned or costs saved as a result of the decision to pursue a project. A cost-benefit analysis can also include intangible benefits and costs or effects from a decision such as employees morale and customer satisfaction.
Detailed explanation-3: -The cost-benefit analysis assigns monetary values to both the benefits and the costs of programs (or policies or projects), whereas the cost-effectiveness analysis assigns monetary values only to the costs, which usually proves easier than assigning monetary values to the benefits.
Detailed explanation-4: -A cost-benefit analysis (CBA) is a tool to evaluate the costs vs. benefits in an important business proposal. A formal CBA lists all project expenses and tangible benefits, then calculates the return on investment (ROI), internal rate of return (IRR), net present value (NPV), and payback period.