Cost Benefit Analysis

[ninovengal]

Hi,
I would like to submit a Cost vs Benefit analysis to bank for a Loan purpose and this is a new project or an extension to the existing project.Project is related to telecommunication field.Can anybody give any template or ideas to create an analysis? this is only for submitting in the bank for completing documentation for Loan request.

 

[kirby]

In basic terms, you show the present value of the cash inflows from doing the project less the present value of the related cash outflows. Someone should already have done something close to this in planning the projected project to get management approval for approaching the bank. Otherwise the project was poorly planned and managed.

 

[Steve-LevelUp]

There is no template, as each of these are highly customized to the project. Before you add in the present value of cash flows, you need to figure out what the projected cash flows are. How much will the project cost to implement and maintain. As much detail as possible here will make the project more believable and will ensure you covered everything. Costs are the easy part. Revenue forecasting is very difficult and should be the bulk of your time. Once you have a realistic revenue forecast (with best/worst case) you can then tack on the present value analysis to generate a rate of return against your cost of capital.