Question: Cost-Benefit Analysis (CBA) is an evaluation technique used to compare the total costs of a program or project with its benefits, which are reduced to
Cost-Benefit Analysis (CBA) is an evaluation technique used to compare the total costs of a program or project with its benefits, which are reduced to a common metric, usually a monetary unit. Other characteristics of CBA are:
| A. | Later benefits are less valuable than early benefits. | |
| B. | The DCF is used to compare outflows (costs) to inflows (benefits), which gives us net present value (NPV). | |
| C. | CBA forces people involved in a project to reduce proposed benefits to a monetary unit. | |
| D. | All answers are correct. | |
| E. | The net benefit is usually the summation of all the benefits minus the costs, all reduced to a present value. | |
| F. | One of the most widely used techniques in CBA is discounted cash flow (DCF). |
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