COST-BENEFIT ANALYSIS IN PROJECT EVALUATION: A COMPREHENSIVE APPROACH TO DECISION-MAKING

Abstract

Cost-Benefit Analysis (CBA) is an essential tool in project evaluation, providing a systematic framework for comparing the total expected costs and benefits of a proposed investment or policy decision. This method helps decision-makers allocate limited resources efficiently, ensuring that social, economic, and environmental gains outweigh the associated expenditures. The study explores the theoretical foundations, methodology, and application of CBA, focusing on its role in both public and private sector projects. It emphasizes the significance of discounting, opportunity cost, and sensitivity analysis in assessing long-term impacts. The paper concludes that CBA not only enhances transparency and accountability but also fosters sustainable development through evidence-based decision-making.