Compare up to four analysis side by side

Cost benefit analysis involves comparing the financial results of the different alternatives as well as carrying out “what if” analysis.

The “Project Comparison Report” feature allows you to select up to four projects and compare the cash flow projections and financial results.

The following example is for a manufacturing firm exploring a plant expansion to increase sales. The two options are:

1. Invest $8.2M to increase the production and sales of products A & B
2. Invest $12.26M to increase the production and sales of products A & B plus add a new product “Z”

Interpretation & Decision

Even though the organizations minimum acceptable return (IRR) before tax is 12.00% and the $12.26M expansion’s return (IRR) of 13.20% exceeds the cut off point of 12.00%, they should choose the $8.2M expansion because of the higher Net Present Value of $2,528,815 at 12.00% versus $868,31 for the $12.26M expansion.