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Cost-Benefit Analysis

Evaluate investment and business decisions with cost-benefit analysis

cost-benefit-analysisdecision-analysisfinancebusiness-analysisnpv

Prompt Template

Perform rigorous cost-benefit analysis for this decision:

**Decision:** {decision}
**Options:** {option_a} vs {option_b}
**Timeframe:** {years} years

**Option A: {option_a}**

**Costs:**
- Initial: ${initial_cost_a}
- Annual operating: ${annual_cost_a}
- One-time costs: ${one_time_a}
- **Total PV of Costs:** ${total_cost_a}

**Benefits:**
- Annual revenue/savings: ${annual_benefit_a}
- One-time benefits: ${one_time_benefit_a}
- Intangible benefits: {intangible_a}
- **Total PV of Benefits:** ${total_benefit_a}

**Net Present Value:** ${npv_a}
**Benefit-Cost Ratio:** {bcr_a}
**ROI:** {roi_a}%

**Option B: {option_b}**
[Same structure]

**Comparison:**
| Metric | {option_a} | {option_b} | Winner |
|--------|------------|------------|--------|
| NPV | ${npv_a} | ${npv_b} | {winner_npv} |
| BCR | {bcr_a} | {bcr_b} | {winner_bcr} |
| ROI | {roi_a}% | {roi_b}% | {winner_roi} |
| Risk | {risk_a} | {risk_b} | {winner_risk} |

**Sensitivity Analysis:**
[Table showing how NPV changes with key assumptions]

**Qualitative Factors:**
- Strategic fit: {strategic}
- Implementation ease: {implementation}
- Risk level: {risk_level}

**Recommendation:** {recommendation}
**Rationale:** {rationale}

Provide: Quantitative analysis + sensitivity + recommendation.

Variables to Replace

{decision}
{option_a}
{option_b}
{years}
{initial_cost_a}
{annual_cost_a}
{one_time_a}
{total_cost_a}
{annual_benefit_a}
{one_time_benefit_a}
{intangible_a}
{total_benefit_a}
{npv_a}
{bcr_a}
{roi_a}
{npv_b}
{bcr_b}
{roi_b}
{winner_npv}
{winner_bcr}
{winner_roi}
{risk_a}
{risk_b}
{winner_risk}
{strategic}
{implementation}
{risk_level}
{recommendation}
{rationale}

Pro Tips

Include intangible benefits. Do sensitivity analysis. Use consistent discount rate. Consider option value.

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