ABSTRACT
Cost–benefit analysis is one of several methods utilized to evaluate the feasibility of capital investment. The cost–benefit analysis calculates the present worth of all benefits, then calculates the present worth of all costs and takes the ratio of the two sums. This ratio is either known as a benefit/cost ratio, a savings/interest ratio, or a profitability index. The cost–benefit analysis is an economic decision-making criterion that can measure the economic consequences of a decision over a specified period of time. It is used to evaluate whether an alternative option is economically viable when compared to a base case that is usually the “do nothing” option or it can be used to rank several options that are competing for a limited budget.
