Q:

How do you write a cost analysis report?

A:

Wikipedia explains that generic cost-benefit analysis reports include various elements, such as a list of alternative projects or programs, a stakeholder list, uniform measurements and the measurement of costs and benefits, a prediction of outcomes over a relevant period of time, the conversion of money value into a currency, the application of the discount rate and a calculated net present value. It should also include a sensitivity analysis and recommendation.

The discount rate in a cost-benefit analysis is simply the interest rate divided by 100 percent in addition to the interest rate. Net present value is the sum of the present values of the cash flows for the same entity. According to Dr. Watkins of San Jose State University, a cost analysis report, which is also referred to as a cost-benefit analysis, seeks to determine if a project or endeavour is worthwhile by estimating and totaling up the equivalent money value of the benefits and costs of a project. Dr. Watkins asserts that this type of economic accounting was pioneered by the French engineer Jules Dupuit in 1848. Later, this concept was furthered by the U.S. Corp of Engineers when they were required to carry out projects for the improvement of the waterway system under the Federal Navigation Act of 1936.


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