Explain the meaning of cost-benefit analysis. Describe briefly the usual steps taken in a typical costbenefit exercise.

Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives used to determine options which provide the best approach to achieving benefits while preserving savings. For example, in transactions, activities, and functional business requirements. A CBA may be used to compare, completed or potential courses of actions. Also to estimate (or evaluate) the value against the cost of a decision, project, or policy. It is commonly used in commercial transactions, business or policy decisions (particularly public policy), and project investments. For example, the U.S. Securities and Exchange Commission has to conduct cost-benefit analysis before instituting regulations or de-regulations.

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