Theory Behind Economic Analysis of Projects

Steve Curry and John Weiss ()
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Steve Curry: International Development Economist and Consultant
John Weiss: University of Bradford

Chapter Chapter 4 in Project Analysis in Developing Countries, 2023, pp 83-109 from Springer

Abstract: Abstract Economic and financial analysis are similar techniques in that they rely on the decision criteria outlined in Chap. 3 . Both analyses are in monetary terms, usually in constant prices, they both apply a discount rate to allow for the effect of time, and they both are based on a with- versus without-project comparison. These are standard procedures of a discounted cash flow analysis. The key difference between them is in the definition of benefits and costs. In both, opportunity cost (i.e. the benefits that would have been created by using the resources committed to a project somewhere else) must define costs. However, because benefits are measured differently, they will be different between the two approaches.

Date: 2023
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DOI: 10.1007/978-3-031-40014-8_4

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