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By F. John Reh, About.com Guide to Management since 1997

Cost Benefit Analysis

Tuesday August 19, 2008
I mentioned earlier a cost/benefit analysis I was doing as part of a presentation to our executive management. It was pretty detailed and took a long time. Ultimately, the presentation was unsuccessful, but the best part of it was the cost/benefit analysis. You can do a similar detailed cost benefit analysis if you need to, but often all that is required is a simple analysis, which can be done quickly and can help you answer difficult questions.

A cost benefit analysis is done to determine how well, or how poorly, a planned action will turn out. Although a cost benefit analysis can be used for almost anything, it is most commonly done on financial questions.

  • Want to know whether that new machine is worth the cost? Do a cost benefit analysis.
  • Not sure whether that proposed marketing campaign is a good idea? Do a cost benefit analysis.
  • Worried about which health care plan to select for your employees? Do a cost benefit analysis.
It's a great tool. This article tells you how to do a cost benefit analysis right.

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