Cost-Benefit Analysis

ˈkɑːst ˈbe.nə.ˌfit ə.ˈnæ.lə.səs / Cost-Benefit Analysis


Cost-benefit analysis (sometimes called benefit-cost analysis or CBA), is a process companies use to weigh decisions or projects and financial gains and costs of that particular decision.Companies use cost-benefit analysis for data-driven decisions and avoid the influence of bias or company politics, resulting in more effective decision-making and business strategies. It may be used for simple choices like new-hire evaluation or something more large-scale, like business expansion and other investments.The standard cost-benefit ratio can be calculated by dividing the total present value of expected benefits and the summation of all associated costs — or simply B/C.

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