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Simple English definitions for legal terms
cost-benefit analysis
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A quick definition of cost-benefit analysis:
Cost-benefit analysis is a way to figure out if something is worth doing. It looks at how much it will cost to do something and compares that to how much good it will do. This helps people make smart decisions about what to do with their time and money.
A more thorough explanation:
Cost-benefit analysis is a method used to compare the costs of a decision or project against the expected benefits, whether they are economic or not. It is a way to determine if the benefits of a decision outweigh the costs.
For example, a company may use cost-benefit analysis to decide whether to invest in new technology. They would consider the cost of purchasing and implementing the technology, as well as the potential benefits such as increased productivity and efficiency.
Another example could be a government deciding whether to build a new highway. They would weigh the cost of construction and maintenance against the benefits of reduced traffic congestion and improved transportation.
These examples illustrate how cost-benefit analysis can be used to make informed decisions by considering both the costs and benefits of a proposed action.