What is a Cost/Benefit Analysis?
The cost/benefit analysis is a strategy or formula for evaluating the potential for some type of operation or project within the confines of a company or other organization. Essentially, the purpose of a cost benefit analysis is to ascertain if conducting the project or operation is feasible, given the current circumstances of the organization. As part of this process, the cost/benefit analysis will identify the benefits that can be reasonably expected to be gained from the effort, while also considering the impact on the organization in terms of various types of cost to carry out the project. Because the cost/benefit analysis is basically a tool that can help an organization side step circumstances that could potentially undermine or even destroy the reputation, integrity, or financial stability of a company, this type of assessment is common to just about every business. The exact methodology for conducting a cost-benefit analysis will vary based on several factors, but the end resul
