How do I interpret the results of a cost-benefit analysis?

How do I interpret the results of a cost-benefit analysis?

To interpret the results, start by comparing the total costs to the total benefits. If benefits exceed costs, it's generally a good sign.

What if the costs are higher than the benefits?

If costs are higher, it may indicate that the project is not viable. You should consider whether the benefits can be increased or costs reduced.

Are there any specific metrics I should look at?

Yes, key metrics include Net Present Value (NPV), Benefit-Cost Ratio (BCR), and Internal Rate of Return (IRR). These help quantify the analysis.

How do I calculate the Net Present Value?

NPV is calculated by subtracting the initial investment from the present value of future cash flows, discounted at a specific rate.