Cost-Benefit Analysis is best described as which of the following?

Cost-Benefit Analysis is best described as which of the following?

• A. A decision-making process comparing what you sacrifice and gain by a specific action
• B. A method to compare only costs
• C. A technique to evaluate only qualitative outcomes
• D. A type of analysis focusing on project timelines

Answer: (A)

Cost-benefit analysis is a decision-making process that weighs what you sacrifice against what you gain for a specific action. It aims to determine whether the net value justifies proceeding, often by putting costs and benefits into a common measure so you can see if benefits exceed costs. While it can assign monetary values, it also incorporates non-monetary factors like time, risk, or quality of life to inform a rational choice about moving forward. This approach is broader than simply tallying costs, and it isn’t limited to qualitative outcomes or to evaluating timelines alone, which is why the option that describes weighing both sacrifices and gains best captures the concept.

Cost-benefit analysis is a decision-making process that weighs what you sacrifice against what you gain for a specific action. It aims to determine whether the net value justifies proceeding, often by putting costs and benefits into a common measure so you can see if benefits exceed costs. While it can assign monetary values, it also incorporates non-monetary factors like time, risk, or quality of life to inform a rational choice about moving forward. This approach is broader than simply tallying costs, and it isn’t limited to qualitative outcomes or to evaluating timelines alone, which is why the option that describes weighing both sacrifices and gains best captures the concept.