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Cost-Benefit Analysis

A technique for assessing the range of costs (or risks) and benefits associated with a given option, usually to determine feasibility. 

Costs are generally in monetary terms. An analytical approach to solving problems of choice. It requires: 

  • (a) the definition of objectives;
  • (b) identification of alternative ways of achieving each objective; and 
  • (c) the identification for each objective or alternative which yields the required level of benefits at the lowest cost.

It is often referred to as cost-effectiveness analysis when the benefits of the alternatives cannot be quantified in terms of dollars.

See also: