What is Benefit-Cost Analysis and how can it be used to evaluate public projects?

Benefit-cost analysis is an evaluation technique used to determine the cost-effectiveness of a project. It allows decision-makers to compare the project's expected future benefits to its expected costs and determine the net gain or loss it may bring to society. It calculates the present value of benefits and costs and considers existing conditions and alternatives, including inaction, to identify the most effective decision. This analysis can be used to evaluate public projects, such as the construction of new infrastructure or the implementation of a new service. This technique can help policy makers make informed decisions about whether to fund a particular project and provide an indication of its potential return on investment.