Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Use a Cost Benefit Analysis Template to Help Analyze Your Projects

By DJ Willis Subscribe to RSS | December 28th 2011 | Views:
loading
 
  



Are you currently considering completing a cost benefit analysis? This technique is extremely helpful when you are attempting to determine whether a project will be a sound investment or when you're wanting to determine which of two projects will produce better results. With this type of analysis you will compare the price of each option overall with the expected benefits. Your ultimate goal would be to see which project has benefits which outweigh the costs and just how much of a difference exists between the two.

This kind of analysis differs from one that looks at how cost effective a project is. Here the costs and benefits are expressed in dollar amounts. This enables these amounts to be adjusted with time in terms of time value for money. When this method is used, all benefits and project costs may be looked at in terms of the present value. Be sure you don't confuse this accounting method with economic impact analysis, cost-utility analysis or Social Return on Investment analysis.

Business and governments utilize a cost benefit analysis template to find out if a project should be completed or perhaps a policy implemented. If this technique is used, many factors are looked at. Foregone alternatives are just one factor that is considered to find out if a policy is going to be effective. Here the status quo will also be examined to see if keeping things how they are could be better.

When you use this method of analysis, you are able to better determine which projects will produce the most results at the least cost. Be aware that, when used for social welfare projects, there is no foregone conclusion. Many other factors play a role in this such as human behavior so the analysis is more of a best guess. You can put a program into place, however, you can't force people to use it if they don't want to.

In order to complete a cost benefit analysis, there are certain steps that must be taken. First a summary of projects to be compared should be completed and then key players should be determined. Figure out how you'll measure costs and benefits and collect this data. You'll then need to look at the complete project and predict the end result of both the costs and benefits.

Costs and benefits should be placed into dollar amounts when doing this kind of analysis. If a discount rate exists, it must be applied before you calculate the net present value of the different options. Finally a sensitivity analysis must be done before recommendations can be created as to which project or projects should be chosen.

When completing a cost benefit analysis, you need to look at any risks that could develop due to choosing a particular project. Probability theory can be quite helpful here. Factor this in to the discount rate or apply it separately. The choice is up to you, but make sure your focus is on risk aversion.

A sensitivity analysis, one of many small business financial services, must also be performed. This shows how, if parameters are changed, the outcomes may also change. There are lots of ways to complete this step and you'll really need to pick the one that is ideal for the needs you have.

DJ Willis - About Author:
If you are looking for information regarding small business financial solutions or you would like to see a cost benefit analysis template, you are in luck because you’ve come to the right place. AccountingMatters.com specializes in only the best spend management, cost benefit analysis, small business financial solutions, and plenty of other services. Stop wasting time, money, and energy and start being in control of your spending by visiting accountingmatters.com.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/finance-articles/use-a-cost-benefit-analysis-template-to-help-analyze-your-projects.htm

Related Finance Articles Subscribe to RSS

Same day loans no credit check - fight with the devils of financial crisis
Published by Sam Hopkins on December 3rd 2011 | Finance
Same day loans no credit check provide instant funds to an individual without looking into their pas...
 
Manage your business records & transactions with Bookkeeping Service
Published by Nelson on January 23rd 2012 | Finance
Complete End to End Business Solution offering various services such as Incorporation, Bookkeeping, ...
 
Loans for UK People: an easy financial solution
Published by Simuels Jack on June 11th 2012 | Finance
Loans for UK people are very helpful in times of need for monetary assistance. According to one’s ...
 
Set up new strategies for your business with Bookkeeping
Published by Nelson on March 14th 2012 | Finance
Complete End to End Business Solution offering various services such as Incorporation, Bookkeeping, ...
 
Could buying a motor from Used Car Dealers Blackpool make financial sense for you?
Published by Mary Porter on June 19th 2012 | Finance
Most drivers know that when buying a car, getting a brand new vehicle is often unnecessary and that ...
 
Independent financial adviser – Propel your earnings
Published by John Kendal on March 31st 2012 | Finance
A financial adviser covers very important issues like wealth management and advises the clients in g...
 
Great hope for the people with poor financial status
Published by Alice Johnsonn on January 3rd 2012 | Finance
Personal loans no credit check are the best way to access fast cash without undergoing any credit ch...
 
Unsecured business loans are funds with fast approval
Published by Macrobusinesscapital@gmail.com on February 3rd 2012 | Finance
There may be several reasons for someone to look for additional or basic finance for his or her firm...
 
Tips for applying start up business funding
Published by Macrobusinesscapital@gmail.com on November 25th 2011 | Finance
For all business owners how to borrow more effectively is quite a lesson to understand business borr...
 
Overcome finance related business issues with a reliable insolvency company
Published by Ashish Pandey on January 16th 2012 | Finance
Any business might go through different kinds of hurdles and when things get out of control it is go...
 
Get fast business funding within days of applying
Published by Merchant Cash on March 29th 2012 | Finance
As with any business, your organisation is all about your ability to manage your customers and your ...
 
What you need to know about business financing?
Published by Matthew Anthony on February 23rd 2012 | Finance
To get finance for your new business can give you a tough time. But business financing Las Vegas fa...
 
Get an absolute idea before opting for business credit loans
Published by Macrobusinesscapital@gmail.com on January 15th 2012 | Finance
The growing world and the rapid increase in the technology have completely changed the life of human...
 
Loans for Unemployed: a financial contribution to jobless!
Published by Jim Kerry on June 5th 2012 | Finance
Cash loans for unemployed help the disappointed jobless people for pulling out of this financial cri...
 
How to get a small or new business grant
Published by Church Henry on June 16th 2012 | Finance
Special grants are given by the authorities for starting up new and small businesses that most peopl...
 
Payday Text Loans UK- Mobile phones give financial amounts!
Published by Cameron White on December 8th 2011 | Finance
Payday text loans UK is best way to overcome small fiscal hardships and it’s not difficult to get ...
 
Consider outsourcing your debt settlement business
Published by John Taylor on December 5th 2011 | Finance
If your business involves debt resolution services, the business may quickly spin out of control due...
 
HOA management- Capable providers for financial as well as property management
Published by Ema Sis on January 12th 2012 | Finance
HOA management companies shall be actual asset for communal administration amenities. They undertake...
 
Unsecured business loans your funding option for urgent business funding
Published by Macrobusinesscapital@gmail.com on December 21st 2011 | Finance
There are certainly such times with business people, no matter whatever kind business they are deali...
 
Benefits of using business lines of credit
Published by Kemar Roach on June 12th 2012 | Finance
Small business line of credit is a kind of financing that is offered by a lot of business banks and ...