Kenya Brief

What is cost benefit analysis?

Cost benefit analysis (CBA) is a process used to evaluate the costs and benefits of an investment decision for optimum use of available resources.

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Kenya Brief

Who needs cost benefit analysis

  • CBA is an integral part of the individual, corporate and government decision making process. By evaluating the costs and benefits of a decision, one can determine whether the investment is viable or whether to opt for an alternative investment.
  • Purpose of cost benefit analysis (CBA)
  • ● First, CBA determines if an investment business case is sound by comparing costs and returns. For a feasible project, benefits must outweigh costs.
  • ● Secondly, CBA offers a baseline for comparing proposed projects with alternative options by evaluating which project generates greatest benefits for a given level of investment.

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