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Will You Add? - The 10 Most Asked Questions of Cost Benefit Analysis
Foreign companies investing in China manufacturing facilities face difficult tasks in dealing with Chinese engineering and construction companies. Chinese design and construction policies and practices are vastly different from those in the West. Cultural differences often frustrate western engineers and managers attempting to complete their new China manufacturing facilities.Engineering design in China of a foreign invested plant required close supervision by the owners to insure that the final design is complete and correct. Many foreign companies assume that Chinese engineering firms understand what they want and will provide a design fulfilling those needs. Constant communication from the owner to the Chinese engineers is necessary and daily supervision and approval of their work is required.Construction after the engineering is complete is an even more demanding task to oversee. Chinese construction company organization is much different from their western countrparts with the Construcion Manager occupying a position where he cannot be re
- Extra administrative effort required to manage project
- Delivery costs if to your account
- Replacement of assets in future years
- Tender preparation costs
- Any specialised tooling associated with the project
Revenue. Revenue can only be attributed to a project if it were not received were the project not to go ahead.
Asset Dispo
I believe there are two things that will make a small business successful, but there are 3 things that need to be done in business. And as an online business owner, I know it's often easier to do the one thing that doesn't have to be done and unconsciously avoid the two things that make businesses successful.The first one is marketing: You should be marketing more. I'm sure you're saying to my, "I already to a lot of marketing." My answer to you is this: If you want to be in business, increase your marketing efforts.A stunning majority of businesses fail in their first year. Why is this? I believe a major cause is inadequate marketing. Here's why:So many entrepreneurs get into business because they want to make money, they want to get out of the daily grind, or they simply think they have a better way of doing something. Those are great reasons to become an entrepreneur. But they don't guarantee success. Not by a long-shot.When people ask me what advice I can give an business owner who is starting up a company, it's this: Market
Let's start, shall we?
Question #1. Is this technique suitable for the small business owner?
Yes. The theory works equally as well for small business as it does for big business and government.
Cost Benefit Analysis is a decision-making technique that assesses the positive outcomes (benefits) as well as the negative outcomes (costs) of different decision alternatives. The trick is to make its implementation easy for the small businessperson.
Once you have basic knowledge of the theory and can enter data into a spreadsheet then the rest is not too difficult.
Question #2. Is this all I need to make better decisions?
No. Cost Benefit Analysis is a tool to assist in making better financial decisions. It is not an end in itself. However, part of the Cost Benefit process requires that you think widely on all options before making a final decision. This is often where most people fail in their decision-making attempts.
Cost Benefit Analysis is also very skilful at providing a single viability output for each competing option, making comparisons objective and easy.
Question #3. What do I include as the Costs and the Benefits?
Costs. All costs attributable to the project are to be included. Some of these are listed below:
- Asset Costs (both Capital and ongoing)
- Supply costs for purchased items
- Extra administrative effort required to manage project
- Delivery costs if to your account
- Replacement of assets in future years
- Tender preparation costs
- Any specialised tooling associated with the project
Revenue. Revenue can only be attributed to a project if it were not received were the project not to go ahead.
Asset Dispos
When purchasing a franchise be sure that you are aware of the hidden pitfalls. The unfortunate stories of these unfortunate Bakers Delight franchisees should be a warning and must read to anyone contemplating purchasing a franchise.Andrew Austin franchisee 10 yearsI began my career with Bakers Delight over fifteen years ago, ten of which were as a franchisee. My problems started three years ago when through a great deal of persuasion from Bakers Delight I purchased a second bakery from them. At the time Bakers Delight had a company-owned shop in Rozelle on the market at a price of $320,000 which seemed a fair price considering I was verbally told that the shop’s annual profits were around $80,000. However, from the first day of trading the shop was running at a loss. When I confronted Bakers Delight about the situation I was suddenly bombarded with various franchise agreement breach notices, some of which I could not explain. The real problems started when the bank demanded my loans to be paid out and my suppliers placed my accounts on hold af
Cost Benefit Analysis is a decision-making technique that assesses the positive outcomes (benefits) as well as the negative outcomes (costs) of different decision alternatives. The trick is to make its implementation easy for the small businessperson.
Once you have basic knowledge of the theory and can enter data into a spreadsheet then the rest is not too difficult.
Question #2. Is this all I need to make better decisions?
No. Cost Benefit Analysis is a tool to assist in making better financial decisions. It is not an end in itself. However, part of the Cost Benefit process requires that you think widely on all options before making a final decision. This is often where most people fail in their decision-making attempts.
Cost Benefit Analysis is also very skilful at providing a single viability output for each competing option, making comparisons objective and easy.
Question #3. What do I include as the Costs and the Benefits?
Costs. All costs attributable to the project are to be included. Some of these are listed below:
- Asset Costs (both Capital and ongoing)
- Supply costs for purchased items
- Extra administrative effort required to manage project
- Delivery costs if to your account
- Replacement of assets in future years
- Tender preparation costs
- Any specialised tooling associated with the project
Revenue. Revenue can only be attributed to a project if it were not received were the project not to go ahead.
Asset Dispo
Did you know:* 1% of all computer data loss is caused by acts of nature* 6% of all PCs will undergo an incident of data loss during the year* 30% of all data loss occurs through human error (accidental data deletion, damaging hardware by dropping a laptop, etc.)* 40% of all data loss is due to hard drive failures and power surges* Another computer just crashed while you were reading thisAre you backing up the data on your hard drive on a regular basis? If not, why not? It's emotionally devastating losing what we think is protected. And if, like most professionals, you depend on your computer like you depend on your next breath, it can literally shut your business down-at least temporarily. Having your computer out of commission for a few days due to a hardware malfunction can cause a loss of business and any momentum you have built up because of lost contacts, not to mention the decline in income from the shutdown.As much as 60% of corporate data now resides unprotected in PC desktops and laptops, while 60% o
Question #2. Is this all I need to make better decisions?
No. Cost Benefit Analysis is a tool to assist in making better financial decisions. It is not an end in itself. However, part of the Cost Benefit process requires that you think widely on all options before making a final decision. This is often where most people fail in their decision-making attempts.
Cost Benefit Analysis is also very skilful at providing a single viability output for each competing option, making comparisons objective and easy.
Question #3. What do I include as the Costs and the Benefits?
Costs. All costs attributable to the project are to be included. Some of these are listed below:
- Asset Costs (both Capital and ongoing)
- Supply costs for purchased items
- Extra administrative effort required to manage project
- Delivery costs if to your account
- Replacement of assets in future years
- Tender preparation costs
- Any specialised tooling associated with the project
Revenue. Revenue can only be attributed to a project if it were not received were the project not to go ahead.
Asset Dispo
Many people nowadays have become more and more concerned about the trails that they live behind while surfing the net. Your IP address, your country, region are just some of the traces that you leave behind. Why should this be reason for concern you might ask. Well, because these are valuable information through which your address, name and even social security number can be found, except if you use anonymous browsing.There are a lot of people that were victims of hackers, which stole their identity and these cases are increasing in number as we speak. Furthermore, at your workplace or in schools or Universities if you go online people can monitor your each step and see what sites you have been visiting. Your privacy is not respected at all. Moreover, there are places where people are just not allowed to visit certain sites. In all these cases anonymous browsing is the solution. It can protect you from people that might harm you or it can give you the privacy and freedom that you need.Anonymous browsing has become more and more of a necessit
Cost Benefit Analysis is also very skilful at providing a single viability output for each competing option, making comparisons objective and easy.
Question #3. What do I include as the Costs and the Benefits?
Costs. All costs attributable to the project are to be included. Some of these are listed below:
- Asset Costs (both Capital and ongoing)
- Supply costs for purchased items
- Extra administrative effort required to manage project
- Delivery costs if to your account
- Replacement of assets in future years
- Tender preparation costs
- Any specialised tooling associated with the project
Revenue. Revenue can only be attributed to a project if it were not received were the project not to go ahead.
Asset Dispo
My first book, UP Your Service!, hit #1 on the national bestseller list within three weeks of release.Thousands of copies have been purchased by individuals and companies around the worldWhere are all these books going!?An increasing number are being purchased by organizations for each member of their staff. A bank in Dubai bought 650 copies. A government ministry in Hong Kong bought 500 copies for all frontline and back-office staff. The Young Entrepreneurs Organization ordered 450 copies for regional conference programs. An infrastructure consulting firm purchased 700 copies for every architect, draftsman, clerk and engineer. The Singapore Police Force purchased 1,200 books – one for every officer on the street.Some organizations purchase the books outright and give them to the staff as a gift or take-home training aid. But others have adopted a unique approach of ‘co-payment’ – and the results have been astounding.Instead of buying the books outright for their staff, these organizations pay only a portion of the price,
- Extra administrative effort required to manage project
- Delivery costs if to your account
- Replacement of assets in future years
- Tender preparation costs
- Any specialised tooling associated with the project
Revenue. Revenue can only be attributed to a project if it were not received were the project not to go ahead.
Asset Disposal and Residual Values. Some assets may be retired prior to the end of their useful lives or may be salvaged at the end of the project. This value is to be included in the cash flows (less the costs associated with their sale or disposal).
Cost Savings. All cost savings attributable to the project are to be included. Wage and salary cost savings must include their overheads and on-costs.
Question #4. How do I treat non-financial costs and benefits?
Since only cash transactions (both costs and benefits) are included in Cost Benefit models, non-financial costs and benefits are usually described by way of notes.
If the Benefit Cost Ratio is = to 1 or > 1 then the use of non-financial costs and benefits would not be required since the project is already VIABLE. Normally these non-financial costs and benefits would be included when comparing competing options whose Benefit Cost Ratio is close to each other.
Question #5. How can I test my assumptions?
You are best placed to make assumptions based on your own experience and judgement. However, you can use a technique to show others how robust your assumptions really are. This technique is called Sensitivity Analysis.
This technique is important to understand because you have made many assumptions in your analysis. These could have been, for instance, the level of new income generated, the savings generated or the residual value of the asset at the end of the project life. These assumptions are at the heart of your analysis and have contributed to your final Benefit Cost Ratio outcome.
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