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The Benefit – Cost analysis is a well – rooted method of evaluating public projects (Rigs,...

The Benefit – Cost analysis is a well – rooted method of evaluating public projects (Rigs, J, & West, T., 1986, page 234.). Do you think the government use this economic method or use other criteria for project evaluation?

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Answer #2

The benefit- cost analysis is a well rooted method of evaluating public projects government have to use another criteria for evaluating public projects. the most frequently used methods for evaluation include:

1.The payback period

2. Account of comparative costs

3. Account of comparative profit

4. Account of comparative profitability

5. Test of the first year.

Simple method should be used only:-

  • In the initial stages of the process of preparation of projects, when there is no enough detailed and extensive information about the investment project is given
  • In the case of projects of small scale, when both the inputs and the effects are minor and do not effect the market position and the financial situation of the company implementing the investment project.
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