- Are you facing difficulty in taking a decision? - Do you know the importance of Cost-Benefit Analysis? In any business or in your personal life, decision making plays a very important role. A decision can lead you to prosperity or failure. Often, you would have come across questions like whether to change the house or not; whether to change the job or not; etc. But the question is `“How to take a decision”?` Herein comes the concept of Cost-Benefit Analysis, which is essentially a great decision-making tool. It includes the analysis of Cost (the amount of money, effort, and time spend to perform an activity) and Benefit (the Outcome associated with that activity). Cost-benefit analysis is an economic evaluation in which the non-financial cost should be considered as a financial cost and non-financial benefits should be considered as financial benefits. **For Example:** Many BPO, IT and Non-IT companies give an increment of only 5% in salary but add other small benefits like- Pick & Drop facilities, Snacks during break time or in the evening, etc. Actually, many big companies try to touch their employees’ nerve or play with their mindset by giving a high level of comfort so that they cannot think about switching anywhere else. In other words, the employees in these companies are not able to do the Cost-Benefit Analysis and hence, not able to take a decision to give a boost to their career growth. >**“It is better to join a small startup, where you’ll get the high opportunity of Learning, Leadership, Salary, and Growth.”** --Jack Ma (CEO, Alibaba) # **Evaluate the Economic and Non-economic Cost** Brainstorm all the costs and all the benefits- First, add cost and then measure benefits **COSTS -**   Add value of (Direct Cost + Indirect Cost + Opportunity Cost + Tangible Cost + Intangible Cost) Vs. **BENEFITS -** Add value either in monetary terms or in terms of increased or decreased efficiency (Production + Employee Safety + Team Unity + Sales + Customer Goodwill + Brand Equity + Environment Protection + Turn over + Efficiency + Errors + Client Satisfaction + Enthusiasm + Global Expansion + New Markets + New Partners + Enjoyment) ► Now check which one is more► If Cost is more than Benefits- Don’t take the decision.► If Benefits are more than Cost- Take the decision. ### **Example** Suppose you need to purchase machinery- Add the following costs- **Costs -** (Price of Equipment + Transportation Cost + Manpower Training Cost + Electricity Cost) Vs. **Benefits -** (Efficiency of Manpower+ Utilization of Time + Increase in Production + Morale of Employees) **If Cost is more than Benefits- Don’t Purchase that Machine.** **If Benefits are more than Cost- Purchase that Machine.**