Explain the relevance of objectives in cost-benefit assessment of project.

Objectives play a crucial role in cost-benefit assessment (CBA) of a project as they provide the basis for evaluating the feasibility, effectiveness, and efficiency of project investments. The relevance of objectives in CBA can be understood in the following ways:

1. Alignment with Stakeholder Priorities: Objectives serve as a guide for determining the desired outcomes and benefits that stakeholders seek to achieve through the project. By clearly defining objectives, stakeholders can prioritize their needs and preferences, ensuring that project investments are aligned with their strategic goals and priorities. CBA helps assess the extent to which project objectives are met and whether the expected benefits justify the associated costs.

2. Quantification of Benefits and Costs: Objectives provide a basis for identifying and quantifying the expected benefits and costs associated with the project. By articulating specific objectives, project planners can identify relevant benefits (e.g., increased revenue, cost savings, improved service delivery) and costs (e.g., investment costs, operational expenses, environmental impacts) that need to be considered in the cost-benefit analysis. CBA helps estimate the monetary value of these benefits and costs, allowing decision-makers to compare and evaluate different project alternatives based on their economic viability and potential returns on investment.

3. Measurement of Project Performance: Objectives serve as benchmarks for evaluating project performance and success. By establishing clear and measurable objectives, project managers can track progress, monitor outcomes, and assess the extent to which project objectives are achieved over time. CBA provides a systematic framework for measuring the economic, social, and environmental impacts of the project against predetermined objectives, enabling stakeholders to make informed decisions about project continuation, modification, or termination.

4. Optimization of Resource Allocation: Objectives help optimize resource allocation by identifying the most cost-effective and efficient means of achieving desired outcomes. CBA allows decision-makers to compare the expected benefits and costs of alternative project options and select the option that maximizes net benefits or returns on investment. By considering the trade-offs between costs and benefits, project planners can allocate resources strategically to ensure optimal utilization and minimize resource wastage.

In summary, objectives are essential for guiding the cost-benefit assessment of a project by providing a clear rationale for project investments, quantifying expected benefits and costs, measuring project performance, and optimizing resource allocation. By linking project objectives to economic, social, and environmental outcomes, CBA helps stakeholders make informed decisions about project feasibility, viability, and value for money, ultimately contributing to the successful implementation and impact of projects.