Cost-Benefit Analysis (CBA) 

Cost-Benefit Analysis (CBA) is a decision-making tool used to evaluate the financial feasibility of a project, investment, or strategy by comparing its costs and benefits. The goal is to determine whether the benefits outweigh the costs and by how much.

Key Components:

  • Costs: Expenses like production, labor, marketing, and operational costs.
  • Benefits: Revenue growth, efficiency improvements, customer satisfaction, or other measurable gains.

Benefits of CBA:

  • Helps in making data-driven decisions.
  • Identifies the most cost-effective option.
  • Assists in risk assessment and strategic planning.

Use Cases:

  • Business Investments: Evaluating new product launches.
  • Marketing Campaigns: Analyzing ROI on advertisements.
  • Project Management: Deciding on new technology implementation.

 

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