Net Benefits (NB) and Net Savings (NS)
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.
KeywordsSteam Transportation Decis Cogeneration
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