This chapter outlines the theory of cost-benefit analysis and discusses its application to determining the cost-benefit of instructional development projects. Three types of applications are discussed: (1) descriptive applications of single projects; (2) predictive studies of proposed projects; and (3) comparative analysis of alternative projects and alternative approaches to a single project. Problems involved in current approaches to the cost-benefit analysis of instructional projects are discussed, and the COST-ED model, which was developed to deal with these projects, is presented. Finally, problems still unresolved in this field are considered. The text is supplemented with 12 figures, and a 28-item bibliography is provided. (Author/EW)