Cost-benefit analysis compares the expected costs of a proposed change with its anticipated financial and non-financial benefits. It identifies one-off and ongoing impacts, assumptions and risks and may use measures such as payback, return on investment or net present value.
How to use this tool
Define options and timeframe
Define the options and appraisal period.
Identify costs and benefits
Identify one-off and recurring costs and tangible and intangible benefits.
Quantify timing and financial measures
Quantify timing, assumptions, risk and relevant financial measures.
Compare options and test sensitivity
Compare options and test the conclusion’s sensitivity to key assumptions.
References & further reading
Yayici, E. (2015). Business Analysis Methodology Book. BA-Works. ISBN 9786058603738.