Cost Benefit Analysis ( Cba )

1982 Words Mar 2nd, 2016 8 Pages
1. Introduction

In the recent years, Cost benefit Analysis (CBA) has been connected to different ranges of strategies and tasks. Indeed, with research of CBA was conducted into two wide areas of work. One area which undertaken to defined the technical-economic reasons for supporting CBA and then again there are studies which completes empirical evaluations over the performance of test of CBA.

For every business and IT that has developed projects, they have to make good decision on whether the projects will have costs and benefits and to determine it is important to supplement such as cost effectiveness analysis with CBA tool to help with strategy deciding. Pearce et al (2006), CBA is a tools that business analysts use to figure out if
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According to Levin and McEwan (2001, p.14) Cost benefit analysis is a tool that evaluates to the assessment of choices as indicated by their costs and benefits when each is measured in economic terms. However Prest and Turvey defined cost benefit analysis as a “practical way of assessing the desirability of projects, where it is important to take a long view (in sense of looking at repercussions in the further, as well as the nearer, future) and a wide view (in the sense of allowing for side-effects of many kinds of many persons, industries, regions, etc.) i.e it implies the enumerations and evaluation of all the relevant costs and benefits”.

The aim of CBA is to put a monetary values on the benefit anticipated from the project and difference the costs which are relied upon to be brought about. The evaluation of ‘doing nothing’ is performed estimation of the costs and benefits that will keep on emerging id the project is not completed. It is vitally requires that all benefits and costs can be given values on a typical scale or denominator i.e. monetary values. This will then permits direct comparison.

Boardman et al (2008, p.6) conducted empirical research on the effects of CBA. In this revealing study, a ranges of CBA performing were tested in this environment and is important to highlight that Boardman et al’s methodology, cost of performing the CBA and results

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