{"id":6344,"date":"2021-10-03T09:27:50","date_gmt":"2021-10-03T09:27:50","guid":{"rendered":"http:\/\/euseguros.pt\/?p=6344"},"modified":"2021-10-16T18:57:10","modified_gmt":"2021-10-16T18:57:10","slug":"cost-benefit-analysis","status":"publish","type":"post","link":"https:\/\/euseguros.pt\/en\/cost-benefit-analysis\/","title":{"rendered":"Cost Benefit Analysis"},"content":{"rendered":"

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What is Cost-Benefit Analysis?<\/strong><\/h3>\n

Cost-Benefit Analysis is a technique designed to determine the feasibility of a project or plan by quantifying costs and bene\ufb01ts including external costs and benefits.<\/p>\n

It essentially compares the costs and benefits of a project and then makes a decision on whether or not to proceed with the project.
<\/strong><\/p>\n

[\/et_pb_text][et_pb_image src=”http:\/\/euseguros.pt\/wp-content\/uploads\/2021\/10\/Cost-benefit-e1514654022602.png” align=”center” _builder_version=”4.4.3″][\/et_pb_image][et_pb_text _builder_version=”4.4.3″ hover_enabled=”0″]<\/p>\n

How to do a Cost-Benefit Analysis?<\/strong><\/h3>\n

To do a cost-benefit analysis, you do the activity if the Marginal Benefit \u2265 Marginal Cost<\/p>\n

Suppose you are presented with two investment opportunities:<\/p>\n

Project #1:<\/span><\/p>\n

Total benefits = $20,000<\/p>\n

Total Costs = $12,000<\/p>\n

Project #2:<\/span><\/p>\n

Total benefits = $30,000<\/p>\n

Total Costs = $45,000<\/p>\n

Between both cases, you would do Project #1 as it has a Net Benefit of $8.000 ($20.000-$12.000 = $$8.000) and wouldn’t do\u00a0 Project #2 as it had a negative net value.<\/p>\n

In Economics you keep buying if you perceive to gain value from the transaction. So the Consumer Surplus is positive.<\/p>\n

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Technique designed to determine the feasibility of a project or plan by quantifying costs and bene\ufb01ts including external costs and benefits.<\/p>","protected":false},"author":1,"featured_media":6346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[152,153],"tags":[187],"yoast_head":"\nCost Benefit Analysis - EU Seguros<\/title>\n<meta name=\"description\" content=\"Technique designed to determine the feasibility of a project or plan by quantifying costs and bene\ufb01ts including external costs and benefits.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/euseguros.pt\/en\/cost-benefit-analysis\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cost Benefit Analysis - 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