In cost-benefit analysis, what is typically compared?

In cost-benefit analysis, the primary focus is on comparing expected costs against expected benefits. This approach evaluates the financial feasibility and potential effectiveness of a project or initiative by quantifying the expected monetary outcomes. The goal is to determine whether the benefits outweigh the costs, which helps in making informed decisions about whether to proceed with the project.

This comparison is essential for guiding resource allocation, as it helps organizations identify options that yield the greatest financial return relative to their investments. By quantifying both the costs and benefits, stakeholders can assess not only the viability of a project but also prioritize among multiple proposals based on their economic impact.

Other considerations, such as the complexity of project tasks, stakeholder influence, and the performance of different versions of a project, may be significant in the overall evaluation process but are secondary to this fundamental comparison of costs and benefits. They do not focus directly on the financial outcomes that cost-benefit analysis aims to elucidate.