# Cost-Benefit Analysis Worksheet

## Overview
Cost-Benefit Analysis (CBA) is a systematic approach to evaluating the economic pros and cons of different alternatives. It helps decision-makers assess whether a project, investment, or decision will provide a net positive return by comparing total expected costs against total expected benefits.

## Pre-Analysis Setup

**Project/Decision:** _________________________________
**Date:** _____________
**Analysis Team:** _________________________________
**Decision Deadline:** _____________
**Analysis Period:** _________ years

## Project Description

### Executive Summary
**Objective:** _________________________________
**Scope:** _________________________________
**Key Stakeholders:** _________________________________
**Success Criteria:** _________________________________

### Alternatives Under Consideration
**Option 1 (Status Quo):** _________________________________
**Option 2:** _________________________________
**Option 3:** _________________________________
**Option 4:** _________________________________

## Cost Analysis

### One-Time Costs (Initial Investment)
| Cost Category | Option 1 | Option 2 | Option 3 | Option 4 |
|--------------|----------|----------|----------|----------|
| Equipment/Assets | $_______ | $_______ | $_______ | $_______ |
| Implementation | $_______ | $_______ | $_______ | $_______ |
| Training | $_______ | $_______ | $_______ | $_______ |
| Consulting/External | $_______ | $_______ | $_______ | $_______ |
| Technology/Software | $_______ | $_______ | $_______ | $_______ |
| Facilities/Infrastructure | $_______ | $_______ | $_______ | $_______ |
| Legal/Regulatory | $_______ | $_______ | $_______ | $_______ |
| Other: _________ | $_______ | $_______ | $_______ | $_______ |
| **Total One-Time** | $_______ | $_______ | $_______ | $_______ |

### Recurring Costs (Annual)
| Cost Category | Option 1 | Option 2 | Option 3 | Option 4 |
|--------------|----------|----------|----------|----------|
| Personnel/Labor | $_______ | $_______ | $_______ | $_______ |
| Maintenance | $_______ | $_______ | $_______ | $_______ |
| Materials/Supplies | $_______ | $_______ | $_______ | $_______ |
| Utilities | $_______ | $_______ | $_______ | $_______ |
| Insurance | $_______ | $_______ | $_______ | $_______ |
| Licenses/Fees | $_______ | $_______ | $_______ | $_______ |
| Marketing/Sales | $_______ | $_______ | $_______ | $_______ |
| Other: _________ | $_______ | $_______ | $_______ | $_______ |
| **Total Annual** | $_______ | $_______ | $_______ | $_______ |

### Indirect/Hidden Costs
| Cost Type | Option 1 | Option 2 | Option 3 | Option 4 |
|-----------|----------|----------|----------|----------|
| Opportunity cost | $_______ | $_______ | $_______ | $_______ |
| Productivity loss | $_______ | $_______ | $_______ | $_______ |
| Change management | $_______ | $_______ | $_______ | $_______ |
| Risk mitigation | $_______ | $_______ | $_______ | $_______ |
| Reputation impact | $_______ | $_______ | $_______ | $_______ |

## Benefits Analysis

### Quantifiable Benefits (Annual)
| Benefit Category | Option 1 | Option 2 | Option 3 | Option 4 |
|-----------------|----------|----------|----------|----------|
| Revenue increase | $_______ | $_______ | $_______ | $_______ |
| Cost savings | $_______ | $_______ | $_______ | $_______ |
| Productivity gains | $_______ | $_______ | $_______ | $_______ |
| Quality improvements | $_______ | $_______ | $_______ | $_______ |
| Time savings | $_______ | $_______ | $_______ | $_______ |
| Error reduction | $_______ | $_______ | $_______ | $_______ |
| Customer retention | $_______ | $_______ | $_______ | $_______ |
| Market share gain | $_______ | $_______ | $_______ | $_______ |
| **Total Quantifiable** | $_______ | $_______ | $_______ | $_______ |

### Non-Quantifiable Benefits
Rate importance (1-5 scale):
| Benefit Type | Option 1 | Option 2 | Option 3 | Option 4 |
|-------------|----------|----------|----------|----------|
| Employee satisfaction | _____ | _____ | _____ | _____ |
| Customer satisfaction | _____ | _____ | _____ | _____ |
| Brand reputation | _____ | _____ | _____ | _____ |
| Strategic positioning | _____ | _____ | _____ | _____ |
| Innovation capability | _____ | _____ | _____ | _____ |
| Risk reduction | _____ | _____ | _____ | _____ |
| Compliance/Legal | _____ | _____ | _____ | _____ |
| Environmental impact | _____ | _____ | _____ | _____ |
| **Total Score** | _____ | _____ | _____ | _____ |

## Time Value Analysis

### Discount Rate
**Selected Rate:** _________%
**Justification:** _________________________________

### Cash Flow Projection
**Option 2:**
| Year | Costs | Benefits | Net Cash Flow | PV Factor | Present Value |
|------|-------|----------|---------------|-----------|---------------|
| 0 | $_______ | $_______ | $_______ | 1.000 | $_______ |
| 1 | $_______ | $_______ | $_______ | _____ | $_______ |
| 2 | $_______ | $_______ | $_______ | _____ | $_______ |
| 3 | $_______ | $_______ | $_______ | _____ | $_______ |
| 4 | $_______ | $_______ | $_______ | _____ | $_______ |
| 5 | $_______ | $_______ | $_______ | _____ | $_______ |

**Option 3:**
| Year | Costs | Benefits | Net Cash Flow | PV Factor | Present Value |
|------|-------|----------|---------------|-----------|---------------|
| 0 | $_______ | $_______ | $_______ | 1.000 | $_______ |
| 1 | $_______ | $_______ | $_______ | _____ | $_______ |
| 2 | $_______ | $_______ | $_______ | _____ | $_______ |
| 3 | $_______ | $_______ | $_______ | _____ | $_______ |
| 4 | $_______ | $_______ | $_______ | _____ | $_______ |
| 5 | $_______ | $_______ | $_______ | _____ | $_______ |

## Financial Metrics Summary

| Metric | Option 1 | Option 2 | Option 3 | Option 4 |
|--------|----------|----------|----------|----------|
| Net Present Value (NPV) | $_______ | $_______ | $_______ | $_______ |
| Benefit-Cost Ratio | _____ | _____ | _____ | _____ |
| Internal Rate of Return | _____% | _____% | _____% | _____% |
| Payback Period | ___ years | ___ years | ___ years | ___ years |
| Return on Investment | _____% | _____% | _____% | _____% |

## Sensitivity Analysis

### Key Variables
**Variable 1:** _________________ 
| Change | Impact on NPV (Option 2) | Impact on NPV (Option 3) |
|--------|-------------------------|-------------------------|
| -20% | $_______ | $_______ |
| -10% | $_______ | $_______ |
| Base | $_______ | $_______ |
| +10% | $_______ | $_______ |
| +20% | $_______ | $_______ |

**Variable 2:** _________________ 
| Change | Impact on NPV (Option 2) | Impact on NPV (Option 3) |
|--------|-------------------------|-------------------------|
| -20% | $_______ | $_______ |
| -10% | $_______ | $_______ |
| Base | $_______ | $_______ |
| +10% | $_______ | $_______ |
| +20% | $_______ | $_______ |

### Break-Even Analysis
**Option 2 Break-Even:** _________ (units/time/revenue)
**Option 3 Break-Even:** _________ (units/time/revenue)

## Risk Assessment

### Risk Probability and Impact
| Risk Factor | Probability | Financial Impact | Risk Score | Mitigation Cost |
|-------------|-------------|------------------|------------|-----------------|
| | H/M/L | $_______ | _____ | $_______ |
| | H/M/L | $_______ | _____ | $_______ |
| | H/M/L | $_______ | _____ | $_______ |
| | H/M/L | $_______ | _____ | $_______ |

### Scenario Analysis
**Best Case Scenario:**
- Assumptions: _________________________________
- NPV Impact: $_______ increase

**Most Likely Scenario:**
- Assumptions: _________________________________
- NPV Impact: Base case

**Worst Case Scenario:**
- Assumptions: _________________________________
- NPV Impact: $_______ decrease

## Stakeholder Impact

### Stakeholder Analysis
| Stakeholder Group | Impact Type | Option 1 | Option 2 | Option 3 | Option 4 |
|------------------|-------------|----------|----------|----------|----------|
| Employees | | | | | |
| Customers | | | | | |
| Shareholders | | | | | |
| Community | | | | | |
| Suppliers | | | | | |
| Regulators | | | | | |

## Decision Criteria

### Weighted Scoring Model
| Criteria | Weight | Option 1 | Option 2 | Option 3 | Option 4 |
|----------|--------|----------|----------|----------|----------|
| Financial Return | ___% | _____ | _____ | _____ | _____ |
| Strategic Fit | ___% | _____ | _____ | _____ | _____ |
| Risk Level | ___% | _____ | _____ | _____ | _____ |
| Implementation Ease | ___% | _____ | _____ | _____ | _____ |
| Stakeholder Support | ___% | _____ | _____ | _____ | _____ |
| **Total Score** | 100% | _____ | _____ | _____ | _____ |

### Decision Thresholds
- [ ] NPV must be positive
- [ ] BCR must exceed: _____
- [ ] Payback period less than: _____ years
- [ ] IRR must exceed: _____%
- [ ] Risk score below: _____

## Recommendation

### Recommended Option: _________________________________

### Key Reasons:
1. _________________________________________________________________
2. _________________________________________________________________
3. _________________________________________________________________
4. _________________________________________________________________

### Implementation Conditions:
1. _________________________________________________________________
2. _________________________________________________________________
3. _________________________________________________________________

### Success Factors:
1. _________________________________________________________________
2. _________________________________________________________________
3. _________________________________________________________________

## Implementation Timeline

### Major Milestones
| Milestone | Target Date | Dependencies | Success Criteria |
|-----------|-------------|--------------|------------------|
| | | | |
| | | | |
| | | | |
| | | | |

### Resource Requirements
**Budget approval needed:** $_____________
**Team members required:** _____________
**External support:** _____________

## Monitoring Plan

### Key Performance Indicators
1. **KPI:** _________________ **Target:** _________ **Frequency:** _________
2. **KPI:** _________________ **Target:** _________ **Frequency:** _________
3. **KPI:** _________________ **Target:** _________ **Frequency:** _________

### Review Schedule
- [ ] 30-day initial assessment
- [ ] Quarterly progress review
- [ ] Annual comprehensive review
- [ ] Post-implementation audit

## Example: Software Implementation CBA

**Project:** CRM System Implementation

**Costs:**
- Software licenses: $100,000
- Implementation: $50,000
- Training: $25,000
- Annual maintenance: $20,000

**Benefits:**
- Sales productivity increase: $150,000/year
- Customer retention improvement: $75,000/year
- Operational efficiency: $50,000/year

**Analysis:**
- NPV (5 years, 10% discount): $421,000
- BCR: 2.4
- Payback: 1.8 years
- Decision: Proceed with implementation

---
*Completed by:* _____________
*Date:* _____________
*Approval:* _____________