Cost-Benefit Analysis
Systematic evaluation comparing benefits and costs of decision/project.
Formula
Net Benefit = Total Benefits − Total Costs
Real World
The UK government used cost-benefit analysis before approving Crossrail, weighing £18bn in construction costs against projected economic benefits of £42bn to London's economy.
Exam Focus
Stress that CBA is weakened by difficulty quantifying intangible costs/benefits — this is a reliable evaluation point for top marks.
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