Because benefits and costs will be summed over future years, a project's schedule can affect the outcome of the benefit-cost analysis.
Schedules for both the proposed project and its alternatives should maximize benefits relative to costs. In some situations, project schedules can be very complex, such as where project alternatives involve stage construction or major rehabilitation during the period of the analysis. The optimum timing for each can be established after costs and benefits have been estimated. Then the timing of each option can be tested through sensitivity analysis, using different dates. This reveals the impact of project timing on the outcome.
Less than optimal timing can distort results. For example, a comparison of refurbishment vs. replacement might be distorted if a premature replacement date is assumed (Transport Canada, 1994).www.webtag.org.uk/index.htm).
Todd Litman (2001), What’s It Worth? Life Cycle and Benefit/Cost Analysis for Evaluating Economic Value, Presented at Internet Symposium on Benefit-Cost Analysis, Transportation Association of Canada (www.tac-atc.ca), at www.vtpi.org/worth.pdf.
TC (1994), Guide to Benefit-Cost Analysis in Transport Canada, Report TP 11875E, Transport Canada; at www.tc.gc.ca/finance/BCA/en/TOC_e.htm.
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