A cost benefit analysis evaluates what?

A cost benefit analysis is a systematic process used to calculate and compare the benefits and costs associated with a project, initiative, or decision. This analysis is primarily concerned with evaluating the expected value of a project against its anticipated costs. By quantifying the potential benefits and comparing them with the costs incurred, project managers can make informed decisions about whether to proceed with a project, continue with modifications, or abandon it altogether.

This analysis serves as a critical tool in project management, enabling stakeholders to assess the profitability and viability of projects, ensuring that resources are allocated effectively and efficiently. A thorough understanding of the expected value—a measure of the benefits generated by the project—relative to costs helps teams to prioritize projects that offer the greatest return on investment or align with strategic goals.

In contrast, other options refer to aspects not directly related to the financial evaluation of a project. Physical aspects, team performance, and market trends, while valuable in their own contexts, do not encompass the core purpose of a cost benefit analysis.