In evaluating whether a project is worthwhile using the cost-benefit approach, which of the following is a primary consideration?

In evaluating whether a project is worthwhile using the cost-benefit approach, which of the following is a primary consideration?

• A. Estimated costs and expected benefits
• B. Startup funding available alone
• C. Productivity potential only
• D. Number of staff required

Answer: (A)

The cost-benefit approach centers on estimating and comparing costs and expected benefits. You quantify all costs (initial investments, ongoing operating costs, maintenance, and even opportunity costs) and all benefits (revenue increases, cost savings, efficiency gains, and even intangible benefits like improved satisfaction). By translating these into monetary terms and often discounting future values, you judge whether the net value is positive, guiding the decision to proceed or not. Among the options, estimating both costs and expected benefits is the essential focus because it directly determines whether the project adds value. Startup funding, productivity potential, or the number of staff are aspects that influence feasibility or scope but do not by themselves determine the overall worth of the project.

The cost-benefit approach centers on estimating and comparing costs and expected benefits. You quantify all costs (initial investments, ongoing operating costs, maintenance, and even opportunity costs) and all benefits (revenue increases, cost savings, efficiency gains, and even intangible benefits like improved satisfaction). By translating these into monetary terms and often discounting future values, you judge whether the net value is positive, guiding the decision to proceed or not. Among the options, estimating both costs and expected benefits is the essential focus because it directly determines whether the project adds value. Startup funding, productivity potential, or the number of staff are aspects that influence feasibility or scope but do not by themselves determine the overall worth of the project.