Benefit-cost analysis is simply balanced decision-making.it is very commonly used in the day to day life work since it is older than the written history. The usual seize of costs and benefits is at times inadequate since when the alternatives are complex or the data vague, then it should be to use proper techniques to keep our ideas clear, orderly and balanced.
This can be defined as narrow financial tool which can underestimate its flexibility in the addressing insubstantial values. (Boardman 2006). It also helps to set a clear cost estimate against alternative methods of achieving an insubstantial benefit, for example, fairness in immigration programs. Choices that tackle policymakers have to be made and quantitative analysis of possible outcomes of substitute courses of action can reduce the doubt and improve the decision-making procedure. The major elements of the cost benefit analysis are benefits, cost and choices and it is not the best way of doing the most good to create the greatest benefit. There is a good method to start a discussion of benefit cost analysis and is by noting the benefit cost analyst and they must work consistently to the clear point of view. (Richard, Layard, Layard & Glaister 1994) It should not restrict to a single point of view. It is clear that a cost from someone’s point of view can be a benefit from another’s. In this case , the benefit cost analysis has acquired the following advantages in the decision making in business;
Examining futures- the CBA has made it quite easy to examine the worthiness of a certain project; this means it takes all the factors of the project to examine the cost and the benefits.
Exploring the Unknown Factors-this means that all projects are examined and should have values.
Flexibility- in this case, the CBA seem to be so simple and it has made business to be mold to their own purpose. (Nas 1996).
The cost benefit analysis has attained all the advantages to suggest that it is the best method or way of decision making in a project or business so as to attain better reputation of customers in the business.
Boardman A. (2006). Cost-benefit analysis: concepts and practice Pearson/Prentice Hall,
Richard P. Layard G., Layard R & Glaister S. (1994)Cost-benefit analysis Cambridge
University Press, London.
Nas T. (1996). Cost-benefit analysis: theory and application SAGE, London