Chapter 8 What is SDLC Models and Types Explain in Details

CHAPTER -8

COST BENEFIT ANALYSIS

Introduction :- Hi everyone in this chapter learn details, What is Cost Benefit analysis and why is an important and where is use. Lets go start now.

Cost Benefit Analysis :- It is a part of economical feasibility study, It is an analysis for estimating cost involved in the developments of a projects and the possible profits to be derived from it, It works a simple rule, i.e identifying the benefit from the proposal and associated costs and subtracting the costs from benefits. It helps us to assign value to a proposal, calculate the future cash flow measures the financial worthiness of it.

How to perform cost-benefits analysis :-

a.) Identify costs and benefits from the systems.

b.) Assign values of the cost and benefits.

c.) Determines the total cash flow.

d.) Determine the projects economic value.

e.) Return on Investments (ROI)

f.) Break -even point (BEP)

g.) Net presents value (NPV)

NPV = Yearly Total Benefits – Yearly Total Cost

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