What does cost-benefit analysis aim to compare in construction projects?

Cost-benefit analysis is a fundamental tool used to evaluate the economic feasibility of a project by comparing the expected costs incurred during the project with the anticipated benefits that the project will deliver. In the context of construction, this analysis helps project stakeholders, including owners and managers, assess whether the financial outlay is justified by the potential returns—be it in terms of financial profit, improved functionality, time savings, or other gains that the project may bring.

Calculating the expected costs involves accounting for all aspects of the project, including materials, labor, overhead, and any other expenses that might arise. Meanwhile, anticipated benefits may encompass direct financial returns and intangible benefits such as enhanced safety, improved environmental performance, or increased user satisfaction. By comparing these two categories, stakeholders can make informed decisions about whether to proceed with the construction project, modify it for better cost efficiency, or consider alternative options.

The other options relate to important considerations in construction but do not encapsulate the primary focus of cost-benefit analysis. Evaluating a contractor's reputation, materials lifespan, or different building methods involves different metrics and considerations that contribute to project success but are not the focus of a traditional cost-benefit analysis.