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Benefit-cost analysis determines whether the direct social benefits of a proposed project or plan outweigh its social costs over the analysis period. Such a comparison can be displayed as either the quotient of benefits divided by costs (the benefit/cost ratio), the difference between benefits and costs (net benefits), or both. A project is economically justified if the present value of its benefits exceeds the present value of its costs over the life of the project. Financial Analysis. The objective of financial analysis is to determine financial feasibility (that is, whether someone is willing to pay for a project and has the capability to raise the necessary funds). A financial analysis answers questions such as, Who benefits from a project? Who will repay the project costs, and are they able to meet repayment obligations? Will the beneficiaries be financially better off compared to what they will be obligated to pay?

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Q: What are the differences between social cost benefit analysis and financial analysis?
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