Cost Benefit Analysis Worksheet

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{company_phone_number}}

Email: {{company_email}}

Website: {{company_website}}

Introduction and Executive Summary

Project/Decision Name: {{project_name}}

Date of Analysis: {{date_of_analysis}}

Prepared By: {{analyst_name}}

An overview of the proposed project or decision, outlining its primary objectives and the key findings of this cost-benefit analysis. This summary should provide a concise understanding of whether the benefits outweigh the costs.

Project Description and Scope

Provide a detailed description of the project or decision being analyzed. Clearly define the scope, objectives, and any assumptions made during this analysis.

Objectives: {{project_objectives}}

Assumptions: {{project_assumptions}}

Identified Costs

This section details all anticipated costs associated with the project or decision. Costs should be categorized as initial, operational, direct, indirect, tangible, and intangible, and quantified where possible. Use a consistent currency, e.g., Rand (ZAR), Naira (NGN), Shilling (KES).

Initial Costs:

- Equipment/Software: {{initial_equipment_cost}} {{currency}}

- Installation/Setup: {{initial_installation_cost}} {{currency}}

- Training: {{initial_training_cost}} {{currency}}

- Other One-Time Costs: {{initial_other_costs}} {{currency}}

Operational Costs (Annual/Monthly):

- Salaries/Wages: {{operational_salaries_cost}} {{currency}}

- Maintenance/Support: {{operational_maintenance_cost}} {{currency}}

- Utilities: {{operational_utilities_cost}} {{currency}}

- Consumables: {{operational_consumables_cost}} {{currency}}

- Other Recurring Costs: {{operational_other_costs}} {{currency}}

Intangible Costs (e.g., disruption, reputational risk, time loss): {{intangible_costs_description}} - Estimated Impact: {{intangible_costs_impact}} {{currency}}

Total Estimated Costs: {{total_estimated_costs}} {{currency}}

Identified Benefits

This section outlines all anticipated benefits, both tangible and intangible, that are expected from the project or decision. Benefits should be quantified and assigned a monetary value where possible, using the same currency as the costs.

Tangible Benefits (Monetized):

- Increased Revenue/Sales: {{benefit_increased_revenue}} {{currency}}

- Cost Savings (e.g., reduced labor, materials, inefficiencies): {{benefit_cost_savings}} {{currency}}

- Improved Productivity: {{benefit_improved_productivity}} {{currency}}

- Asset Value Appreciation: {{benefit_asset_appreciation}} {{currency}}

- Other Quantifiable Benefits: {{benefit_other_quantifiable}} {{currency}}

Intangible Benefits (e.g., improved customer satisfaction, brand reputation, employee morale, compliance): {{intangible_benefits_description}} - Estimated Value: {{intangible_benefits_value}} {{currency}}

Total Estimated Benefits: {{total_estimated_benefits}} {{currency}}

Cost-Benefit Analysis Calculation

Net Present Value (NPV) Method (if applicable): Use a discount rate to account for the time value of money, typically relevant for projects spanning multiple years.

Discount Rate: {{discount_rate}}%

Net Benefit (Total Benefits - Total Costs): {{net_benefit}} {{currency}}

Benefit-Cost Ratio (Total Benefits / Total Costs): {{benefit_cost_ratio}}

Payback Period (Estimated time to recover initial investment): {{payback_period}} (e.g., months/years)

Sensitivity Analysis

Examine how changes in key variables (e.g., cost estimates, benefit projections, project duration) would affect the overall outcome of the analysis. This helps in understanding the robustness of the findings.

Scenario 1 (Optimistic): {{optimistic_scenario_description}} - Net Benefit: {{optimistic_net_benefit}} {{currency}}

Scenario 2 (Pessimistic): {{pessimistic_scenario_description}} - Net Benefit: {{pessimistic_net_benefit}} {{currency}}

Recommendation and Conclusion

Based on the analysis, provide a clear recommendation regarding the project or decision. Summarize the key reasons for the recommendation and any critical success factors or risks that need to be managed.

Recommendation: {{recommendation_details}}

Justification: {{recommendation_justification}}

Approval/Signatures

___________________________

{{approver_name}}

{{approver_title}}

Date: {{approval_date}}

___________________________

{{reviewer_name}}

{{reviewer_title}}

Date: {{review_date}}