Cost-benefit analysis


A cost-benefit analysis (CBA) compares the expected or estimated costs and benefits (or opportunities) connected with a project decision to see if it makes sense from a business standpoint.

You could argue that the decision is sound if the anticipated advantages outweigh the costs. However, if the costs outweigh the benefits, the decision or project may need to be reconsidered.

Because a CBA is only as good as the data it is based on, organizations with more mature financial reporting have a better chance of succeeding.