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COST AND BENEFIT ANALYSIS

Cost and benefits may be tangible or


Intangible, direct or indirect, fixed or variable. Cost
estimates
Also take into consideration hardware, personnel, facility and
Supply costs for final evaluation. Costs/benefits analysis,
then
Identifies the costs and benefits of a given system.

Data analysis is prerequisite to


cost/benefit
Analysis. System investigation and data gathering lead to
assessment of current finding. Our interest is in determining
how efficiently certain steps are performed, how they
contribute to achieving the intended goals, and the cost of
making improvement.

Steps of cost and benefits analysis

1. H/W costs relate to the purchase of the computer


2. Personnel costs include EDP staff salaries and benefits
3. Facility costs
4. Operating costs include all costs associated with day-to-
day
5. Operation of the system.
6. Supply costs are variable costs.

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