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What are the main stages in the Cost Benefit Analysis Approach to Educational Planning?

      

What are the main stages in the Cost Benefit Analysis Approach to Educational Planning?

  

Answers


Raphael
Stage 1(a) Calculation of social costs & social benefits. This would include calculation of:
o Tangible Benefits and Costs (i.e. direct costs and benefits)
o Intangible Benefits and Costs (i.e. indirect costs and benefits – externalities)
o This process is very important – it involves trying to identify all of the significant costs & benefits
o Stage 1(b) - Sensitivity analysis of events occurring – this relates to an important question - If you estimate that a
possible benefit (or cost) is £x million, how likely is that outcome? If you are reasonably sure that a benefit or
cost will ‘occur’ – what is the scale of uncertainty about the actual values of the costs and benefits?
o Stage 2: - Discounting the future value of benefits – costs and benefits accrue over time. Individuals normally
prefer to enjoy the benefits now rather than later – so the value of future benefits has to be discounted
o Stage 3: - Comparing the costs and benefits to determine the net social rate of return
o Stage 4: - Comparing net rate of return from different projects– the government may have limited funds at its disposal and therefore faces a choice about which projects should be given the go-ahead.
raphael answered the question on August 4, 2021 at 06:07


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