Definition

cost-benefit analysis software

Cost-benefit analysis software is a computer program or suite that assists personnel in the complex task of determining whether or not a proposed plan or project will pay off.

Cost-benefit analysis (CBA) compares the expected financial gain derived from a particular set of actions with the expected cost of providing each action to determine the most profitable option. The projected benefits of a plan or program are divided by its estimated total long-term cost. Additionally, subjective variables such as customer satisfaction are often quantified and factored in. The program must take into account the fact that the impacts of costs and the values of benefits might extend far into the future.

Cost-benefit analysis software has grown popular in large enterprises, health-care facilities, and government agencies where solutions can appear deceptively profitable or unprofitable. In particular, it can be difficult to quantify the social benefits of a proposed project in numerical terms. Cost-benefit analysis software can break a multifaceted scenario down into discrete factors and then assist personnel in quantifying those factors and comparing their relative significance in numerical terms.

This was last updated in March 2012
Posted by: Margaret Rouse

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