Cost-Benefit Analysis

Conduct a cost-benefit analysis using a template, and explain the concept of opportunity cost and how a cost-benefit analysis aligns with organizational needs. Recommend a plan of action based on the cost-benefit analysis.


Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in sequence.

To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community.

  • What are the differences between variable and fixed costs? How do these affect financial forecasting?
  • What is the purpose of a cost-benefit analysis?


The following resources are required to complete the assessment.

This resource includes information on writing a cost-benefit analysis.

Use this template to complete the assessment.

This tool provides a step-by-step guide with a real-world example.

Use the Cost-Benefit Analysis Template linked to complete Part 1 of this assessment. Use the following scenario that continues the scenario from Assessment 2 as the foundation for this assessment:

One of the physician’s groups in the clinic would like to purchase an MRI machine. Currently, clients who need an MRI must schedule an appointment at another facility, adding time and cost to any treatment they may need. The machine will be available for all the physicians in the clinic and will require additional staff to operate the equipment and the office area where it will be housed.

You must prepare a cost-benefit analysis to present to the physicians so they may decide whether to move forward with the purchase. Be sure to consider the non-monetary costs, such as productivity, as well as the non-monetary benefits, such as improved customer satisfaction. Although these may be difficult to quantify, they are important costs and benefits that must be considered.


Prepare a two-part cost-benefit analysis.

Part 1

  • Complete the cost-benefit analysis template for the purchase of an MRI machine for the clinic with estimated costs and benefits values.

Part 2

Based on the cost-benefit analysis, write a 2–3-page summary:

  • Explain the concept of opportunity cost.
  • Explain how the cost-benefit analysis aligns with organizational needs and future growth.
  • Recommend a plan of action that is supported by the cost-benefit analysis. (Should the clinic purchase the MRI machine, or not?) Reference specific areas of the analysis in your recommendation.

Submit both parts of the assessment at the same time. Please note that you will need to attach each part separately since they are different types of documents.

Additional Requirements

  • Include a title page and reference page for Part 2.
  • Number of pages: 3–4, not including the title page and reference page (Part 2 only).
  • At least two current scholarly or professional resources (Part 2 only).
  • APA format for citations and references used in Part 2.
  • Times New Roman font, 12 point (Part 2).
  • Double-spaced (Part 2).

Competencies Measured

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

  • Competency 1: Develop financial strategies to address dynamic environmental forces. (L24.2, L24.5, L17.2)
    • Recommend a plan of action based on a cost-benefit analysis.
  • Competency 2: Analyze the cost and revenue implications for organizational changes due to environmental forces. (L18.2, L12.1)
    • Analyze the cost and benefits of purchasing equipment for a health care organization.
    • Explain the concept of opportunity cost.
    • Explain how a cost-benefit analysis aligns with organizational needs and future growth.
  • Competency 4: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration. (L6.1, L6.2, L6.3, L6.4)
    • Write content clearly and logically with the correct use of grammar, punctuation, and mechanics.
    • Format citations and references using the APA style.
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