cost-benefit analysis
"Cost-benefit analysis" is a key decision-making tool used across various fields to evaluate the feasibility and efficiency of projects and policies.
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Definition
C1Economics and Finance
(technical, academic)A systematic method to evaluate the potential benefits and costs of a decision, project, or policy to determine if the benefits outweigh the costs.
Example
- The government conducted a cost-benefit analysis to decide on the new infrastructure project.
- Businesses often use cost-benefit analysis to determine the viability of new ventures.
B2Business Management
(formal)A decision-making tool that compares the total expected costs against the total expected benefits to identify the best course of action.
Example
- Before launching the new product, the team performed a cost-benefit analysis to assess its potential success.