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Cost–benefit analysis (CBA), sometimes called efficiency and safety, it makes no attempt to value

benefit costs analysis (BCA), is a systematic approach its effects on the environment.
to estimate the strengths and weaknesses of Environmental evaluation therefore requires an
alternatives (for example in transactions, activities, alternative analytical structure – environmental
functional business requirements or projects impact assessment(EIA)
investments); it is used to determine options that
provide the best approach to achieve benefits while The new approach to appraisal (NATA)
preserving savings.[1] The CBA is also defined as a
systematic process for calculating and comparing was the name given to a multi-criteria decision
benefits and costs of a decision, policy (with framework used to appraise transport projects and
particular regard to government policy) or (in proposals in the United Kingdom. NATA was built on
general) project. the well established cost–benefit analysis and
environmental impact assessment techniques (such
Broadly, CBA has two main purposes: as those contained in the Highways Agency's Design
Manual for Roads and Bridges (DMRB)) for assessing
To determine if an investment/decision is sound transport projects and proposals.
(justification/feasibility) – verifying whether its
benefits outweigh the costs, and by how much; The New Approach to Appraisal (also NATA) was the
To provide a basis for comparing projects – which name given to a multi-criteria decision framework
involves comparing the total expected cost of each used to appraise transport projects and proposals in
option against its total expected benefits.[2] the United Kingdom. NATA was built on the well
CBA is related to (but distinct from) cost- established cost–benefit analysis and environmental
effectiveness analysis. In CBA, benefits and costs are impact assessment techniques (such as those
expressed in monetary terms, and are adjusted for contained in the Highways Agency's Design Manual
the time value of money, so that all flows of benefits for Roads and Bridges (DMRB)) for assessing
and flows of project costs over time (which tend to transport projects and proposals.
occur at different points in time) are expressed on a
common basis in terms of their net present value. In April 2011 the Coalition Government decided that
the term NATA would no longer be used. However,
Closely related, but slightly different, formal the principles and key elements of the NATA
techniques include cost-effectiveness analysis, cost– framework remain in the Department for Transport's
utility analysis, risk–benefit analysis, economic WebTAG Transport Analysis Guidance.
impact analysis, fiscal impact analysis, and social
return on investment (SROI) analysis. The appraisal summary table (AST) is designed for
presentation to those decision-makers charged with
What is the 'Payback Period' determining whether approval for construction
The payback period is the length of time required to should be granted, and if so what level of priority
recover the cost of an investment. The payback should be assigned to it.
period of a given investment or project is an The AST summarizes the assessment of the scheme
important determinant of whether to undertake the in question against the following objectives and
position or project, as longer payback periods are impacts.
typically not desirable for investment positions. The
payback period ignores the time value of money
(TVM), unlike other methods of capital budgeting
such as net present value (NPV), internal rate of
return (IRR), and discounted cash flow.

Environmental appraisal of highway schemes

While the cost benefit framework for a highway

project addresses the twin objectives of transport