What is the purpose of a cost-benefit analysis in AI implementation?

• A. To evaluate the benefits related to the business use case against the costs involved.
• B. To forecast the exact time to market.
• C. To measure only the hardware costs.
• D. To determine the vendor's market share.

Answer: (A)

Assessing whether an AI project will deliver net value by weighing expected benefits against all costs. A cost-benefit analysis looks at tangible gains like productivity improvements, cost reductions, faster decision-making, and potential revenue growth, and weighs them against the total costs of the initiative—data acquisition and labeling, model development, hardware or cloud infrastructure, integration with existing systems, ongoing maintenance and monitoring, and governance or security considerations. This helps determine if the investment is worthwhile, if the scope should be adjusted, or if alternative approaches should be pursued, and it supports financial measures such as ROI and payback period. It isn’t about predicting exact time to market or focusing solely on hardware costs, nor about assessing a vendor’s market share, which are separate considerations.