12 Topics
5 Days
Programme Overview
Training Description
• Chief Financial Officers (CFOs) and Senior Executives
• Budget Managers and Financial Analysts
• Strategic Planning Professionals
• Business Unit Leaders and Divisional Controllers
• Project and Program Managers
Session Objectives
- Master the fundamental principles of Cost-Benefit Analysis. Quantify both the tangible and intangible costs and benefits of a project. Develop a systematic framework for conducting a comprehensive CBA. Apply different valuation techniques to non-monetary factors. Use CBA to justify and prioritize budget proposals.
About the Course
Cost-Benefit Analysis (CBA) is a cornerstone of effective financial decision-making, providing a rigorous framework for evaluating the true value of projects, policies, and strategic investments. By systematically comparing total expected costs against total benefits, CBA moves beyond simple financial metrics to deliver a comprehensive assessment of return on investment. This approach enables leaders to allocate scarce capital efficiently and ensure that every expenditure directly aligns with long-term organizational goals.
Over 10 intensive days, this training course delivers a practical methodology for conducting and interpreting Cost-Benefit Analysis across the project lifecycle. Participants will gain hands-on experience in quantifying tangible and intangible factors, navigating discount rates and time value, and translating complex financial models into actionable executive recommendations. By mastering these skills, attendees will transform budget planning into a proactive, evidence-based process that maximizes organizational value.
Curriculum & Topics
12 Topics | 5 Days
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Subtopic 1.1:
What is Cost-Benefit Analysis (CBA)?
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Subtopic 1.2:
The purpose and value of CBA in decision-making.
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Subtopic 1.3:
The difference between CBA, Cost-Effectiveness, and Cost-Utility Analysis.
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Subtopic 1.4:
Historical context and evolution of CBA.
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Subtopic 1.5:
Ethical considerations in conducting a CBA.
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Subtopic 2.1:
The systematic steps of a CBA process.
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Subtopic 2.2:
Defining the project scope and objectives.
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Subtopic 2.3:
Identifying all relevant stakeholders.
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Subtopic 2.4:
Establishing the baseline or "do-nothing" scenario.
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Subtopic 2.5:
Practical example: mapping out a simple CBA.
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Subtopic 3.1:
Differentiating between direct and indirect costs.
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Subtopic 3.2:
The concept of opportunity costs.
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Subtopic 3.3:
Identifying initial investment, operational, and maintenance costs.
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Subtopic 3.4:
Considering external costs and negative externalities.
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Subtopic 3.5:
Workshop: brainstorming a project's full range of costs.
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Subtopic 4.1:
Identifying direct and indirect benefits.
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Subtopic 4.2:
The value of tangible and intangible benefits.
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Subtopic 4.3:
Considering external benefits and positive externalities.
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Subtopic 4.4:
Understanding the perspective of different stakeholders.
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Subtopic 4.5:
Workshop: brainstorming a project's full range of benefits.
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Subtopic 5.1:
Methods for monetizing costs and benefits.
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Subtopic 5.2:
Market-based valuation and shadow pricing.
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Subtopic 5.3:
Using revealed preferences (e.g., travel costs, property values).
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Subtopic 5.4:
Using stated preferences (e.g., willingness to pay, contingent valuation).
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Subtopic 5.5:
Challenges and limitations of valuation methods.
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Subtopic 6.1:
The importance of time in CBA.
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Subtopic 6.2:
Calculating present value and future value.
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Subtopic 6.3:
Understanding the role of discount rates.
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Subtopic 6.4:
Techniques for selecting an appropriate social or private discount rate.
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Subtopic 6.5:
Practical exercise: discounting future costs and benefits.
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Subtopic 7.1:
Calculating Net Present Value (NPV).
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Subtopic 7.2:
The NPV rule for project acceptance.
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Subtopic 7.3:
Understanding the Benefit-Cost Ratio (BCR).
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Subtopic 7.4:
The Internal Rate of Return (IRR) and its limitations.
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Subtopic 7.5:
Comparing and contrasting different decision metrics.
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Subtopic 8.1:
Sources of uncertainty in a CBA.
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Subtopic 8.2:
Introduction to sensitivity analysis.
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Subtopic 8.3:
Conducting scenario analysis.
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Subtopic 8.4:
Using Monte Carlo simulation for complex risk modeling.
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Subtopic 8.5:
Dealing with optimistic, pessimistic, and most likely scenarios.
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Subtopic 9.1:
How CBA can address equity issues.
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Subtopic 9.2:
Understanding the distribution of costs and benefits among different groups.
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Subtopic 9.3:
The concept of "weights" and how to apply them.
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Subtopic 9.4:
Assessing the social impact of a project.
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Subtopic 9.5:
Ethical frameworks for making trade-offs.
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Subtopic 10.1:
Handling non-monetary outcomes.
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Subtopic 10.2:
The use of CBA in regulatory impact analysis.
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Subtopic 10.3:
Valuation of environmental goods and services.
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Subtopic 10.4:
Advanced techniques for valuing human life and health.
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Subtopic 10.5:
The role of public consultation and stakeholder engagement.
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Subtopic 11.1:
A deep dive into a public infrastructure project.
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Subtopic 11.2:
Analyzing the costs and benefits from a societal perspective.
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Subtopic 11.3:
Considering long-term and external impacts.
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Subtopic 11.4:
Discussing policy implications of the CBA findings.
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Subtopic 11.5:
Group workshop: a case study exercise.
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Subtopic 12.1:
A deep dive into a business investment or program.
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Subtopic 12.2:
Analyzing the costs and benefits from a firm's perspective.
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Subtopic 12.3:
The link between CBA and financial performance.
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Subtopic 12.4:
Using CBA to justify a new product or expansion.
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Subtopic 12.5:
Group workshop: a case study exercise.
