With each project we have a desired end point, a definition of success. We spend time, and energy, creating solutions and plans to solve a problem or get to a desired end point; however we may not go ahead with plans because they are not simply financially viable or just too expensive.

Cost Benefit Analysis is a simple and widely used technique for deciding whether to make a change or to go ahead with a project.

As the name suggests, simply add up the value of the benefits of a course of action, and subtract all the costs associated with it. This calculation may be dollar focussed or undertaken on a more qualitative variation.

Costs are either one-off, i.e. a single expense, or may be incurred over a period of time eg weekly monthly etc. or perhaps could be a combination of both.

The Benefits of a course of action are most often received over a period of time.

We build this effect of time into our analysis by calculating a pay-back period. This is the time it takes for the benefits of a project to repay, to the investor or business, the full cost of implementing the project.

In business, companies usually look for pay-back over a specified period of time - e.g. three years being quite normal. This payback period is usually calculated using complicated mathematical and financial formulae, using interest rates and CPI etc and is often described as a percentage return on investment per year.

Simplistically for our purposes let