Explain The Meaning And Concept Of Cost Benefit Analysis?


1 Answers

Muhammad Abdullah786 Profile
In development planning it is the investment which plays an important role. This is concerned not only with the amount of investment but it also deals with the fields and projects where investment will be made. Investment will be channel zed and allocation in those fields, sectors and projects which are properly appraised. Then the question before the planners is this how the projects are appraised or what projects will be included, and what not is this be included, and what not in respect of allocation in the form of investment. In this, the planners employ a technique which is simply known as cost benefit analysis.

Despite its link with traditional economics, the CBA was basically devised by an engineer. During 1930's it was applied to evaluate the water resources in US. After wards, it was spread to other countries and applied in other fields like defense, transport, underground railways and airports. Some people think that it was originally introduced by Jules Dupuit in France inn 1844. The Eastern European it is popular in both developing as well as in developed countries where feasibility reports are prepared before launching any project or making investment in any project. So CBA is employed to measure the social rate of return of the project.

Answer Question