358. High-quality Benefit: Cost Analysis template, for free
As part of a project funded by the CRC for Water Sensitive Cities, I developed a flexible but powerful spreadsheet template for Benefit: Cost Analysis. An updated version is now available at the CRC web site.
Most economists create a new spreadsheet for each BCA they do. Indeed, I include training on how to do that in the online BCA course I give (see below). However, there are significant advantages in using a standard template.
- Any new spreadsheet you create is highly likely to have bugs in it. Bugs are much less likely in a template that has been thoroughly tested and widely used.
- If different people are using the same template, it’s relatively easy to pick up someone else’s BCA and work out what they have done.
- The developer of a BCA template that intends it to have an ongoing life is likely to be able to justify investing the time in a wider range of facilities and capabilities than is sensible to do for a one-off BCA.
If you’re a BCA user, do check out my template, which is called the INFFEWS BCA Tool. It has range of features that I think you’ll like. Here’s my pitch:
- Supports specification of a detailed project logic
- Is flexible, providing multiple approaches for entering costs and benefits of different types
- Allows additional sheets to be inserted for calculations that can be linked into the BCA Tool
- Includes options for discount rates that are constant or dynamic over time
- Accounts for the effect of incomplete behaviour change resulting from the project
- Allows for the probability of project failure
- Provides facilities for recording data sources and comments by independent reviewers
- Provides 14 graphs and 12 tables depicting different aspects of the BCA results
- Conducts Monte Carlo analysis to provide probability distributions of results
- Conducts break-even analysis and a calculates a sensitivity index to indicate key variables
- Provides sensitivity analysis of discount rates and the excess burden of taxation
- Provides all standard BCA decision criteria: NPV, BCR, IRR and MIRR
- Provides advice on which BCA decision criteria to use in different contexts
- Reports on who benefits and who pays across up to eight stakeholders
- Provides detailed results for the project overall and for the project’s lead organisation
- Is a reliable, fully tested and widely used framework
- Includes a user guide and context-sensitive video help
- Includes a checklist of steps for Quality Assurance of the BCA
- Automatically transfers existing data to new versions of the BCA Tool when released
- Will continue to be maintained, updated and improved
Although the framework was built for a particular context (urban water and urban greening projects), it works fine for any type of project.
To obtain a copy of the template, and the extensive accompanying documentation, click here. Instructions: It’s a bit of a convoluted process, unfortunately. First, click on DOWNLOAD THE BCA TOOL. Then, on the right of screen, below the price of $0.00, enter in your details, tick the terms and conditions box, and click on Add to Cart. Then Checkout Now. At this point, you have to create an account with Monash. Follow that process through and login. At one point, they sent me an email to confirm my email address, and it went to my Junk folder. I found it there, moved it back to my inbox, and was able to finish the process. Eventually, once you have suffered enough, they send you another email called “Your Monash University Online Store order confirmation” and within that you can find “BCA Tool Zipped file download (download)”. Click on download. That gives you the Excel file. The documentation is back on the page where you start this adventure: here. It is down at the bottom of the page under Supporting Materials.
Brief introductory course on BCA
If you are new to BCA, here is a very introductory course, in 10 videos totalling 1 hour 14 minutes.
Comprehensive course on Applied BCA
I invite you to consider enrolling in my 12-week online course on Applied Benefit: Cost Analysis. Build your BCA expertise and gain the practical skills you need to undertake a complex Benefit: Cost Analysis. Online: high-quality video lectures and interviews, live workshops. No existing economics background required.
Discounts are available for bulk enrolments and for enrolments from selected countries. Bursaries (with a discount of more than 90%) are also available for enrolments from selected countries.
The course runs starting in late February and late July each year. To enrol, click here or on the image at left, and go to the Business and Commerce section.
“A fantastic program and course. It is by far the best course I have been involved in. I learned so much and there is still lots to learn which you have shared with links so I can return to refresh/learn as needed.”
“Essential for new BCA users.”
“Taught in an engaging way with many real-world examples.”