A cost-benefit analysis is a tool by which business decisions are conducted.

It is used to calculate the

total cost of the project to the total benefits of the project in order to determine that project should be
implemented or not. First step RV rentals will use is identifying costs which include cost of hiring,
material and equipment, rent of the location, and legal considerations. Next step will be identifying
benefits which include direct profits from RV-R services, increased investments, cost needed to improve
standard and quality of business. Final step taken by RV-Rentals for CBA is evaluation in which we will
find NPV first as positive NPV indicates that project is beneficial and money should be invested in this
project. Other measures taken by RV-Rentals is calculation of IRR, which is tool used in capital budgeting
for measuring he profitability in the investment. As our project has a higher IRR, which indicates that it Is
worthwhile investment, and project should be seen as beneficial opportunity. Payback period is 3.11
years which is not a longer payback period indicating the beneficial investment.