Question

How to calculate net present value in cost benefit analysis?

Answer 1

Net present value (NPV) is determined by calculating the costs (negative cash flows) and benefits (positive cash flows) for each period of an investment. The period is typically one year, but could be measured in quarter-years, half-years or months. ... NPV is the sum of all the discounted future cash flows.Cost benefit analysis (CBA), sometimes called benefit costs analysis (BCA), is a systematic approach to estimating the strengths and weaknesses of alternatives (for example in transactions, activities, functional business requirements or projects investments); it is used to determine options that provide the best .