| Cost-benefit Analysis |
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Information AboutCost-benefit Analysis |
| CATEGORIES ABOUT COST-BENEFIT ANALYSIS | |
| decision theory | |
| costs | |
| evaluation methods | |
| welfare economics | |
| public finance | |
| SHOPPER'S DELIGHT | |
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Often, this involves monetary calculations of initial expense vs. expected return. For example, a product manager may compare manufacturing and marketing expenses to projected sales for a proposed product, and only decide to produce it if he expects the revenues to eventually recoup the costs. During cost-benefit analysis, monetary values may also be assigned to less tangible effects such as risk, loss of reputation, Market Penetration , long-term strategy alignment, etc. This is especially true when governments use the technique, for instance to decide whether to introduce business Regulation , build a new road or offer a new drug on the state Healthcare . In this case, a value must be put on human life or the Environment , often causing great controversy. Cost-benefit calculations typically involve using Time Value Of Money formula. This is usually done by converting the future expected streams of costs and benefits to a Present Value amount. SEE ALSO
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