Cost-Benefit Analysis

Finance
Product Development

Overview

Cost-Benefit Analysis is a systematic approach to evaluating the economic pros and cons of different choices to determine the best option.

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Cost-Benefit Analysis (CBA) is a methodical process used to evaluate the economic advantages (benefits) and disadvantages (costs) associated with a particular decision or project. By quantifying and comparing these benefits and costs, CBA aims to determine whether the benefits outweigh the costs and by how much. This evaluation helps in making informed decisions that maximize net benefits to stakeholders.

The process involves identifying all possible costs and benefits, assigning a monetary value to each, and then discounting future costs and benefits to their present value. This allows for a comprehensive assessment that takes into account the time value of money. By providing a clear picture of the trade-offs involved, CBA aids in choosing the most economically viable option.