Cost Benefit Analysis Example 1Cost Benefit Analysis Example 1Cost Benefit Analysis Example 1
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Cost Benefits analysis
One of the key items in any business case is an analysis of the costs of a project that includes some
consideration of both the cost and the payback (be it in monetary or other terms).

1. A basic analysis
1.1 Benefit measures:
For Small projects a cost-benefit analysis can be fairly basic – the table below gives an example of
what might be appropriate.
Benefit of proposed
product(s)

Evidence

Return on investment

Financial analysis of the cash flows associated with the new technology, to
show a net gain. Simple payback techniques are OK for Small projects
(section 3.1).

Improved performance
e.g. lower operating
costs; improved
quality; better
customer service;
higher speed or more
flexibility

Technical capabilities of the proposed new system showing:

Better customer
service

expected productivity gains;

reduced waste, e.g. lower reject rates, less reworking;

reduced energy consumption.

Such information might come from:

suppliers;

results