Question

What  are  the  strengths  and  weaknesses  of  the  10  steps  to  a  complete  CBA?

Answer 1

Strengths and weaknesses of a 10 step process to complete CBA(cost benefit analysis)

*strengths

In the 10 steps,we can understand that in all the 10 steps,cost calculation and benefit calculation is directly or indirectly involved.first of all a partificular project is carefully examined and its outline is understood.now the question is whether that project should be carried forward or not.because of analyzing and following the 10 steps, it can be known whether the project is profitable or not.different costs are calculated and it includes external cost also.different benefits are calculated and it includes external benefits also.10 steps make sure that proper techniques are applied in calculatin costs and benefits.

The first step is framework of analysis.in this step proper framework is formed.conditions are monitored related to project.it makes the base of the project strong.discount costs and benefits to obtain present values step makes the present value of the project known.in the sensitivity analysis cost and benefit is analyzed and it is made sure that benefits are greater then costs in order to proceed with the project.

*weaknesses

The weakness is that while carrying out the stepd,it is not guaranteed that whatever estimation for costs and benefits are made,would be 100% correct and the results would guarantee full proof solution on carrying ou the project.some of the projects are complicated and these steps may not prove sufficient for the decision to be made in order for this project to be carried out or not.in the computation step,external costs and benefits are involved,there unforced stastical errors can take place.it is not necessary that in the recommendation step,proper recommendation would be provided,because other factors,besides costs and benefits should also be considered while allowing the project to proceed forward.