Cost-Benefit Analysis Using Microsoft Excel

Management Concepts

How long?

  • 3 days
  • online, in person

Management Concepts

Disclaimer

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Full disclaimer.

Who should attend

This course is designed for individuals who want to understand and apply cost-benefit analysis to support decision-making in their organizations.

About the course

Optimal decision-making requires trade-off analysis; justification of the allocation of scarce financial resources to attain performance goals; and evaluation of policies for organizational benefit. This process can be daunting if your actions aren’t rooted in empirical evidence. Cost-benefit analysis provides a model for organizing facts, assumptions, estimates, and findings to align your decisions with your organization’s goals and mission. You will learn to conduct accurate cost-benefit analyses using fundamental principles, best practices, and powerful tools.

Learning Objectives

  • Select measurement(s) and measure all cost-benefit elements
  • Forecast cost and benefits over a relevant time period
  • Convert all costs and benefits into a common currency
  • Apply a discount rate
  • Calculate net present value of project net benefits
  • Perform sensitivity analysis
  • Evaluate alternatives and select the best value option based on costs and benefits
  • Incorporate risk (uncertainty) in calculating costs and benefits
  • Utilize Microsoft Excel tools to facilitate compilation and analysis of cost-benefit elements
  • Reference applicable OMB guidance and Executive Orders

Course Topics

Cost-Benefit Analysis Fundamentals

  • Cost-Benefit Analysis Defined
  • Critical Concepts for Cost-Benefit Analysis
  • Uses for Cost-Benefit Analysis
  • What Documents Provide Guidance for Federal Programs?
  • Presidential Executive Orders
  • Cost Benefit Analysis Essentials
  • Basic CBA Decision Criteria Measures
  • Conflicting Measures
  • The Need for More than One Measure
  • Distinguishing Negative Benefits from Costs
  • Cost Effectiveness Principle
  • Lesson Wrap-Up

Costs

  • Relevant and Non-relevant Costs
  • Opportunity Costs versus Outlays
  • Sunk Costs versus Future Costs
  • Fixed Versus Variable Costs
  • Total Costs
  • Mixed Costs
  • Depreciation
  • Direct versus Indirect Costs
  • Personnel and Overhead Costs
  • Lesson Wrap-Up

Benefits

  • Guidance for Quantifying Benefits
  • Creating Models for Benefits to the Public Without Price Data
  • Weighing and Scoring Benefits
  • Calculating Benefits of Regulatory Action
  • Computing Benefits Where Price Data Is Available
  • Lesson Wrap-Up

Time Value of Money

  • Concept of the Time Value of Money
  • Simple Interest
  • Compound Interest
  • Future Value
  • Present Value
  • Present and Future Value Using Excel Functions

Time-Based Decision Criteria Measures Used in Cost Benefit Analysis

  • The Timing of Costs and Benefits and the Cash Flow Diagram
  • The Payback Period
  • The Net Present Value
  • The Principle of Equivalence
  • Calculating the Net Present Value
  • Excel’s =NPV function
  • Discount Rate
  • Internal Rate of Return (IRR)

Sensitivity Analysis

  • Uncertainty Versus Risk
  • Expected Value with Uncertainty
  • Sensitivity Analysis
  • Sensitivity Analysis in Excel
  • Performing a Sensitivity Analysis Using Excel's Data Table Feature
  • Performing Sensitivity Analysis Using Excel's Data Tables

Cost-Benefit Analysis Using Microsoft Excel at Management Concepts

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Disclaimer

Coursalytics is an independent platform to find, compare, and book executive courses. Coursalytics is not endorsed by, sponsored by, or otherwise affiliated with any business school or university.

Full disclaimer.

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