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Net Benefits (NB) and Net Savings (NS)

  • Rosalie T. Ruegg
  • Harold E. Marshall

Abstract

The NB method is reliable, straightforward, and widely applicable for finding the economically efficient choice among building alternatives. It measures the amount of net benefits from investing in a candidate project instead of investing in the foregone opportunity. NB is computed by subtracting the time-adjusted costs of an investment from its time-adjusted benefits. If NB is positive, the investment is economic; if it is zero, the investment is as good as the next best investment opportunity;1 if it is negative, the investment is uneconomic.2 Emphasis is on economic efficiency rather than cost effectiveness because the method is appropriate for evaluating alternatives which compete on benefits, such as revenue and other advantages which are measured in dollars, in addition to costs.

Keywords

Fixed Baseline Candidate Project Good Investment Opportunity Foregone Opportunity Single Glazing 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. Mishan, EJ. 1976. Cost-Benefit Analysis, An Introduction. New York: Praeger Publishers.Google Scholar
  2. Saaty, Thomas L. 1988. Multicriteria Decision Making: The Analytic Hierarchy Process. Pittsburgh: University of Pittsburgh Press.Google Scholar

Copyright information

© Springer Science+Business Media New York 1990

Authors and Affiliations

  • Rosalie T. Ruegg
  • Harold E. Marshall

There are no affiliations available

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