Cost-benefit analysis
Cost-benefit analysis (also known by its acronym, CBA; alternatively spelled as cost/benefit analysis; hereinafter, CBA) is an analysis which compares and quantifies the financial and non-financial costs of making a change or implementing a solution compared to the benefits gained. Cost-benefit approach is approach to decision-making in allocation of resources based on CBA.
Definitions
According to the BABOK Guide (3rd edition),
- Cost-benefit analysis. An analysis which compares and quantifies the financial and non-financial costs of making a change or implementing a solution compared to the benefits gained.
According to the HRBoK Guide,
- Cost-benefit analysis (CBA). A process of measuring business decisions. A financial review of various options to determine if the benefits are greater than the costs.
According to the Corporate Strategy by Lynch (4th edition),
- Cost/benefit analysis. Evaluates strategic projects, especially in the public sector, where an element of unquantified public service beyond commercial profit may be involved. It attempts to quantify the broader social benefits to be derived from particular strategic initiatives.
According to the Strategic Management by David and David (15th edition),
- Cost/benefit analysis. An activity that involves assessing the costs, benefits, and risks associated with marketing decisions. three steps are required to perform this: (1) compute the total costs associated with a decision, (2) estimate the total benefits from the decision, and (3) compare the total costs with the total benefits.
