The paper “The Application of Cost-Benefit Analysis” is a great example of a macro and microeconomics essay. Sound decisions have to be made based on the underlying requirements of the different stakeholders. Numerous factors influence the decision process and also the significance of any project. However, safety and health are some of the important variables associated with the cost-benefit analysis. Cost-benefit analysis is a systematic approach that is used to estimate the weaknesses and strengths of alternatives that satisfy the functional, activities, or transaction requirements of the business. Numerous components are used in determining costs and benefits and include cost savings, time, and labor.
However, the extent of application fluctuates based on the situation and requirements of the analysis. Nevertheless, cost-benefit analysis is an approach that is used to compare the benefits and costs of a project and usually influence policy direction. The purpose of cost-benefit analysis includes providing a basis for project comparison and justifying investments. The analysis is possible by comparing the expected benefits and cost of the project and uses the methodology to determine the most appropriate approach. The aspect of benefit, further, introduces the value of preventing a fatality.
The aim of the paper is to discuss cost-benefit analysis and value of preventing a fatality. 2.0 Cost-Benefit Analysis In a cost-benefit analysis, the costs and benefits are grouped based on the same unit of measurement, and commonly monetary value is used, to enable effective comparison resulting in ineffective analysis of the different options. According to Reynolds et al. , cost-benefit analysis (CBA) is a methodology that is used to value costs and benefits that enable comparison resulting in a reduction of risks associated with the safety on a consistent basis while also defining the decision making an approach.
The purpose of CBA is to create a mechanism for reducing risks ‘ so far as is reasonably practicable’ (SFAIRP). However, CBA is not the only methodology or determinant used in SFAIRP. Furthermore, CBA should not be used to remove the current good practice or control measures.
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