What is cost-benefit analysis? What are the steps involved in using co

What is cost-benefit analysis? What are the steps involved in using cost-benefit analysis to make the optimal choice?

What will be an ideal response?

ANSWER

Cost-benefit analysis is a calculation that adds up the costs and benefits of a particular choice using a common unit of measurement. It involves the conversion of all costs and benefits into a common unit of measurement so that they can be compared. The difference between the benefits and costs of choosing an alternative is referred to as the net benefit of the alternative. The alternative with the highest net benefit is the optimal choice.