What is Cost-Benefit Analysis Template?

A cost-benefit analysis (CBA) template is a structured framework used to evaluate the potential benefits and costs of a project, policy, or investment decision. It helps organizations make informed decisions by systematically weighing the advantages against the disadvantages. Here's a general outline of a cost-benefit analysis template:

I. Project/Proposal Overview

• Briefly describe the project or proposal being evaluated.
• Identify the key stakeholders and their interests.

II. Benefits

• Quantify the expected benefits, including:
  • + Financial benefits (e.g., increased revenue, cost savings)
  • + Non-financial benefits (e.g., improved efficiency, enhanced customer satisfaction)
  • + Intangible benefits (e.g., environmental impact, social responsibility)

III. Costs

• Identify and quantify the costs associated with the project or proposal, including:
  • + Initial investment costs
  • + Ongoing operational costs
  • + Maintenance and replacement costs
  • + Opportunity costs

IV. Analysis

• Calculate the net benefits by subtracting the total costs from the total benefits.
• Determine the payback period (the time it takes for the project to generate enough cash to recover its initial investment).
• Evaluate the internal rate of return (IRR) or net present value (NPV) to determine the project's profitability.

V. Sensitivity Analysis

• Test the robustness of the analysis by varying key assumptions and parameters.
• Identify areas where uncertainty is high and consider scenarios that might affect the outcome.

VI. Conclusion

• Summarize the findings, including the net benefits, payback period, IRR/NPV, and any recommendations for further action.
• Highlight any limitations or uncertainties in the analysis.

Here's a more detailed template with columns:

This template provides a basic structure for conducting a cost-benefit analysis. You can customize it to fit your specific needs and add more columns or sections as necessary.