Determining Economic Feasibility: Four Cost / Benefit Analysis Methods

Abstract

Most organizations have more investment alternatives than resources to invest. Therefore, they hope that the benefits of the system they choose to invest in will be greater than the alternative systems they rejected. An accurate cost/benefit analysis must take into account the time value of money, the risks inherent in the development of a new system, and the costs and benefits of a system throughout its life cycle. This article describes four approaches to comparing the costs and benefits of a proposed system.

Additional information

Notes on contributors

Richard T. Dué

Richard T. Due is the president of Thomsen Dub and Associates Ltd. in Edmonton, Alberta. Canada, which provides information technology consulting and training services.