What is a Cost-Benefit Analysis used for?

A Cost-Benefit Analysis (CBA) is a systematic approach used to evaluate and compare the costs and benefits associated with different decisions or options. It helps decision-makers to quantify the advantages and disadvantages of potential actions in monetary terms, allowing for an informed choice. By weighing the total expected costs against the total expected benefits, stakeholders can determine which option provides the best overall value.

This method is particularly valuable in various fields, including economics, finance, and business, where resource allocation and project feasibility are crucial. It provides clear insights into which choices are likely to yield the most positive outcomes, making it an essential tool for strategic planning and decision-making processes.

In contrast, the other options focus on narrower aspects of business operations. Assessing production efficiency is more specialized and pertains to optimizing processes rather than evaluating multiple scenarios. Determining marketing strategies involves analyzing market conditions and customer preferences, while analyzing staff performance centers on human resources rather than the broader evaluation of options. Thus, the comprehensive nature of Cost-Benefit Analysis in evaluating different options makes it the best choice among the provided answers.