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Cost Benefit Analysis Formula

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  • Cost Benefit Analysis Formula

    I was wondering if anyone could help me out with a question?

    Under the Cost/Benefit portion of the application, I have seen different equations for quantifying the cost benefit. Do you present the CB based on the portion your department will pay or the overall cost?

    $100,000 (total project cost) / 10,000 population = $10
    $5,000 (dept. cost) / 10,000 population = $.50

  • #2
    Focus on FEMA share, but don't forget time. Calculate dollars per person per year--$100,000 Federal share, 10-year life for the equipment, population 10,000 = $1 per person, per year.

    “I am more than just a serious basketball fan. I am a life-long addict. I was addicted from birth, in fact, because I was born in Kentucky.”
    ― Hunter S. Thompson


    • #3
      When calculating the cost benefit do you have to use your year around population, or can you use the number and justification you provided for the question about seasonal increase in population?


      • #4
        If you have a significant seasonal increase, I would calculate it both ways. Don't sell yourself short by doing permanent population only, but don't exaggerate by claiming seasonal population. The reviewers understand what you're talking about.
        “I am more than just a serious basketball fan. I am a life-long addict. I was addicted from birth, in fact, because I was born in Kentucky.”
        ― Hunter S. Thompson


        • #5
          Just put it into numbers. Include with that the advantage you may see in insurance ratings, lowered injury rate, workmans comp, etc in the narrative, but don't oversell it. Keep it short, but include both a formula of some type and a narrative. The formula format is not that important, reviewers just want to see something there.


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