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


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

Technical capabilities of the proposed new system showing:

Better customer

expected productivity gains;

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

reduced energy consumption.

Such information might come from: