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Cost benefit analysis

The evaluation of the social and/or economic worth of a prospective project. It attempts to measure in monetary terms not only the visible, calculable gains and losses of a project but also the abstract benefits or possible detrimental resuits. If the total projected ‘gain’ exceeds the foreseeable ‘loss’ then the project may be approved. Such analyses are not only applied to future possibilities but also to existing situations to decide whether to maintain or scrap them. Cost benefit analyses are viewed with some cynicism, particularly in situations which require a number of subjective assessments; they are often regarded as mere academic games.

Reference: The Penguin Business Dictionary, 3rd edt.