Use as a way to estimate the costs and benefits of a proposed large development project, government program, or regulation.
- Should be straightforward - accept a proposal if the benefits exceed the costs.
- However, should just be used as a guide as it does not provide conclusive evidence of all costs or benefits because it is difficult to put a dollar value on environmental costs and benefits.
- Goal: To select projects with greatest net present value, indicating the highest return on investment. If the project shows a negative net present value, the project should be avoided entirely.