To determine whether a project makes financial sense, you would perform which of these?

A cost-benefit analysis is a systematic approach to estimating the strengths and weaknesses of alternatives used to determine the best approach to achieve benefits while preserving savings. In the context of a project, this analysis evaluates the total expected costs against the total expected benefits to ascertain whether the project is feasible and beneficial from a financial standpoint. It provides a clear picture of whether the potential returns justify the costs involved, helping decision-makers understand if a project is worth pursuing.

Cost-benefit analysis helps in breaking down the various components of costs, such as initial investment, operational costs, and any ongoing expenses, while also quantifying the benefits, which can include increased revenue, market share, or efficiency gains. This evaluation is crucial for organizations looking to allocate resources effectively and make informed decisions on which projects to undertake.

Other methods, like return on investment analysis and financial forecasting, while valuable for long-term planning and financial assessments, specifically focus on different metrics or timeframes. Risk assessment, meanwhile, identifies potential obstacles but does not directly evaluate the financial viability in terms of costs versus benefits. Thus, cost-benefit analysis provides the most direct and relevant assessment for determining a project's financial sense.