Tricky Topics Deciphered: Cost benefit analysis

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Our AAT study guide dives into the tricky topic of cost benefit analysis for AAT students doing the Professional Diploma in Accounting.

Cost benefit analysis is a useful decision making technique when used effectively. It allows you to measure the costs and benefits, both tangible and intangible, of a decision, to help you decide which action to take.

Run through an example scenario in the downloadable PDF below where we look at the various tangible and intangible costs and benefits. The intangible are harder to calculate, and include things like employee motivation, but cannot be ignored.

Remember, it’s only if the calculated benefit is higher than the cost that you should go ahead with your decision.

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Cath Littler is an accountancy learning specialist working with AAT and Mindful Education. .

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