Cost Analysis And Cost Advantage

When there is a new system that is proposes to be developed, the cost has a major consideration and rule which gives impact on whether to accept or reject the system that has been proposed. The people who are involved in developing the system wants to know whether they will gain benefits such a profit on developing the system or they are just creating a system for nothing. For it to know the cost of the project, it is important to estimate the cost and the benefits of it and it must be calculated. This method of calculating the benefits and cost are called the Cost Analysis or the Cost Benefit Analysis.

According to F.John Reff, a cost analysis is use to know and determine the status of a given project, it will tell how well and how poor the

The system that should be produced must be one hundred percent running and it must satisfy the wants and needs of the customer that brought the system. However, as an organization it is important not just to give a quality of product but also to gain more profit in return. You cannot give a fully functioning system to the customer without having money to invest on it. If our development cost and time outweigh the amount of revenue earned from a particular project, then you we will not stay strong in our business. Because there are many useful things that the Cost Benefit Analysis can be brought to the organization there are three primary benefits that an organization can enjoy by using it. One of the primary benefits of Cost Analysis is the loss of Prevention. When we can clearly see the costs that we invested on a particular project and balance those cost with the sales profits, we would be able to prevent investing on the things that are needed for the project. We can prevent spending things that will not benefit the organization and either the successfulness of the systems being