Most people do not realize that they conduct a cost-benefit analysis when making everyday decisions. The decision can be for something simple, for example, choosing whether to use beef or a plant-based alternative to make chili. It can also be more complex, such as deciding whether to purchase a property in a suburb with a large yard or a luxury loft condominium with breathtaking city views. A cost-benefit analysis is simply a systematic approach that individuals and organizations can use to analyze the risks and rewards of a project and select the optimal solution.

Apply cost-benefit analysis process to justify the cost to build a new fire station, to staff the station with personnel, and to purchase apparatus for that new station.