Cost benefit analysis

What is it?

Cost benefit analysis is a technique for comparing the costs of taking a particular course of action with the benefits achievable from the outcome. It is a method of assessing the viability of the course of action in monetary terms.

When to use it

When selecting the best course of action to take.

What does it achieve?

In solving the problem, it is necessary to consider the effects of the solution. It is of little benefit if the costs of the planned action far outweigh the benefits achieved

Key steps

  • Determine the period of analysis
  • Determine factors
  • Value the factors
  • Analyse and evaluate the information