Cost-benefit analysis is used for determining which alternative is likely to provide the greatest return for a proposed investment. Sometimes referred to as cost-effectiveness analysis, it is relevant to businesses as well as to not-for-profit entities and governmental units.
As its name suggests, you simply add up the value of the benefits of a course of action, and subtract the costs associated with it
example: Cost-benefit analysis traditionally has been used to evaluate the feasibility of public projects. Today, it is being advocated as a method to evaluate the advisability of environmental and business regulation.
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