Cost-Benefit Analysis, sounds complex but we do it every day
TIFO about Cost-Benefit Analysis So what is a Cost-Benefit Analysis? A Cost-Benefit Analysis (CBA) is an analysis performed based on the advantages and disadvantages of a strategic move taken by a company. It analyses both the economic and opportunity cost of the move along with its advantages. Most major companies make many big decisions based on the CBA of that decision, and so do a lot of people in their lives. How do I do a Cost-Benefit Analysis? Well, a good CBA is quite tricky. However, whether you are doing it for a company or for yourself, there are a few tips and tricks which you can follow. The first and most important thing to find out is the monetary cost of making that decision along with any monetary benefits which it might bring. Let's take the example of a couple who is remodelling their house's kitchen. Just as an estimate, we can assume that the cost of the remodel would be $50,000 and that the remodel would increase the value of their house by $20,0...