Cost / Benefit Analysis Template (Page 3 of 4) in pdf

Cost / Benefit Analysis Template Page 3

Human Resources

Administration

Net Benefit or Cost of Viable

Net Present Value

(xx% Discount Rate)

Analysis:

A “Net Present Value” calculation is used to account for the fact that $1 today is not worth the

same as $1 five years from now, due to inflation and interest rates. The use of a “Net

Present Value” calculation should be used to take into account the time value of money, for

regardless of whether the full or incremental cost approach is used.

If there are some assumptions that have a significant impact on the cost or benefit, a

sensitivity analysis should be presented. Contingency allowances or interest rate premiums

should be used to account for differences in certainty / risk. The cost / benefit analysis

should be reviewed for reasonableness through the use of benchmarks, other organization’s

experience, industry data, etc. This would include the use of a public sector comparator for

public-private partnership projects.

B. Qualitative Analysis – Non-Financial Benefits & Costs:

Some of the costs and benefits may not be quantifiable (difficult to attach a dollar value). For

example, non-quantifiable benefits may be: increased customer satisfaction or increased

staff morale. Non-quantifiable costs may be: reduced corporate image or adverse public

perception. Where reasonable, these should be translated into quantifiable benefits (i.e.,

increased staff morale, may lead to high productivity, which may lead to less over-time).

However, the non-quantifiable cost / benefits that cannot be translated into quantifiable

cost/benefits should be summarized in the following manner:

For each Viable Alternative

Qualitative Summary

Description

Stakeholder(s) Impacted

Benefits:

Benefit 1

Description of benefit 1

Benefit 2

Description of benefit 2

Costs:

Cost 1

Description of Cost 1

Cost / Benefit Analysis Template Page 3