What are the main challenges in cost-benefit analysis?

What are the main challenges in cost-benefit analysis?

Some key challenges include accurately estimating costs and benefits, dealing with uncertainty, and accounting for intangible factors.

How do you handle uncertainty in cost-benefit analysis?

Uncertainty can be managed through sensitivity analysis, scenario planning, and using probabilistic models to assess risks.

Can you give examples of intangible factors?

Sure! Intangible factors include things like customer satisfaction, brand reputation, and employee morale, which are hard to quantify.

What methods can improve the accuracy of cost estimates?

Improving accuracy can involve using historical data, expert judgment, and detailed project breakdowns to refine estimates.

Are there any common pitfalls to avoid?

Yes, common pitfalls include overestimating benefits, underestimating costs, and failing to consider the time value of money.