Cost Benefit Analysis Report

Cost Benefit Analysis Report

Introduction

The cost benefit analysis is a method that is used to compare the benefits with the cost associated with a project. Cost Benefit Analysis helps in finding out two main aims of the analysis, first is to find out that the investment made by a person is justifiable or provides an analysis whether an investment is benefiting or generating losses, and second it helps in creating comparison between two projects in which an estimation of cost and benefits is done to find out whether a project is beneficial or costly for the government or the investor. It has been proposed a project of building a basin for providing clean and clear water so that it can contribute towards a better environment for the people living in Miami and rest of the America. The Cost Benefit Analysis Report will provide whether a construction business in Miami will be beneficial or costly and who will be the providing funds for this project.

Discussion

Part-I: Cost Benefit Analysis

The project which can contribute towards the prosperity of the Miami City and ultimately of the whole country is to gain advantage from building a basin as it will be able to increase the water supply and keep people healthy. Improvement in the environment for the people can play an important role in the development of the city and the whole economy. In order to assume or estimate whether this project will be successful or not a cost benefit analysis needs to be done. The cost benefit analysis will first determine whether benefits are more than the cost or not and second they provide an analysis whether a project is successful or not. (www.sfwmd.gov)

This analysis will be helpful in making the decisions of whether the public expenditure is used in the correct manner or not. The cost benefit analysis determines the social costs and benefits along with the accounting profits or losses. The social benefit can be determined by analyzing the social benefits of a project like basin construction business will help in bringing the improvement in the environment of the society for example pollution rate will decrease, health of the society will improve, rules and regulations will be followed to protect the environment and etc. The social cost on the other hand will determine whether a project will have negative effect on the society as land will be acquired that could have been used in creating employment and etc.(www.cdc.gov)

According to Card, Dellavigna, Maleimender (2011) Economic theory will have an effect on the research of the project as it will help in evaluating the consumption and production of the project. It will also help the firm in analyzing there resources in order to meet the demands of the customers for a long period of time.

According to Drisen (2004), thus by estimating the resources, consumption and production of a project the economic theory have an effect on the cost benefit analysis. The economic theory affects the cost benefit analysis in a way that ...