This checklist is designed to guide the user through the process of performing a cost-benefit analysis to evaluate the financial feasibility of a project or investment. It ensures that all necessary factors are considered before making a decision.
Clearly outline the goals and objectives of the project. Identify what is being analyzed and establish parameters for the analysis.
List all potential costs associated with the project, including fixed, variable, direct, and indirect costs. Consider both initial and ongoing expenses.
Enumerate the expected benefits, both tangible and intangible, that will arise from the project. Include revenue generation, cost savings, and any qualitative benefits.
Assign monetary values to each identified cost and benefit to enable comparison. This may require research or consultation with relevant stakeholders.
Use the NPV formula to assess the value of the project by discounting future benefits and costs to present value terms.
Calculate the ROI by comparing the net benefits to the total costs to determine the financial return relative to the investment.
Evaluate how changes in key assumptions (such as cost estimates or benefit projections) would affect the outcome of the analysis.
Compile the findings into a concise report summarizing costs, benefits, NPV, and ROI, providing a recommendation based on the analysis.
Present the analysis to stakeholders for review and approval before proceeding with the project. Ensure all concerns are addressed.