What is a cost-benefit analysis?
A cost-benefit analysis is an analysis used internally to evaluate all the potential costs and revenues that a company might generate from a project or opportunity. The outcome of the analysis will determine whether the project is financially feasible or if the company should seek other opportunities. A cost-benefit analysis should also factor in the opportunity cost into the decision-making process on whether to take or pass on a project.
How to create a cost-benefit analysis template
A cost-benefit analysis is an examination of whether a project’s benefits outweigh its expenses. Managers in any business, from startups to large corporations, can use this process to predict whether an investment will provide them with profits or other positive results. If you run a business or just want to make thoughtful financial decisions, consider calculating the cost-benefit analysis of changes you are thinking about implementing. Just follow the steps in the Excel template and you’ll have the information you need to make a thorough analysis.
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