Cost-Benefit Analysis
Systematic evaluation comparing benefits and costs of decision/project.
Formula
Net Benefit = Total Benefits − Total Costs
Real World
Before building Crossrail in London, Transport for London conducted a cost-benefit analysis estimating £42bn in economic benefits against £18bn in construction costs to justify taxpayer funding.
Exam Focus
Highlight limitations (intangible costs/benefits are hard to quantify) — this earns evaluation marks beyond just describing the process.
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