C9.2.3 Evaluation

 

C9.2.3 CBA

The final stage is to weigh the costs and benefits to determine if the proposed action is worthwhile. In essence you subtract all identified costs from the expected benefits to determine whether the positive benefits outweigh the negative costs.

To do this you compare the total costs and total benefits values:

If the total costs are much greater than the total benefits, you can conclude that the project is not a worthwhile investment of company time and resources.

If total costs and total benefits are roughly equal to one another, it is best to re-evaluate the costs and benefits identified and revise the cost benefit analysis. Often items are missed or incorrectly quantified, which are common errors in a CBA.

If the total benefits are much greater than the total costs, you can conclude that the proposed action is potentially a worthwhile investment and should be further evaluated as a realistic opportunity.

 

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