Hey guys, Im currently doing an internship at a firm.
Im currently working on a proyect that has no cost whatsoever, but my boss asked me for cost/benefit analysis. I’m kinda afraid to ask him, if he needs one (and think I am idiot, who does not know shit, lmao).
I made sure to check and the proyect will not inquire any additional monetary expenses
Help apreciated
In: Economics
There’s always a cost to something. If nothing else, any project takes time away from employees doing the project who could be doing something else. People’s time does have an impact on the business since they pay them wages/salaries.
Even if you build something with parts already on hand, those parts aren’t available for you any more and aren’t on hand any more, and still need to be replaced. “Spare parts” are for emergencies so you’re not waiting on shipment of new parts when things break.
Things that are totally free still aren’t. Make sure it’s worth even the distraction it would cause.
It may not need cash but it will need someones time when they could be doing something else, the use of some equipment? space in the building?
First of all you are an intern, you are there to learn stuff, so dont be afraid to ask questions.
And to your question anything has a cost to it. The project takes time of peoples work day that have to be paid. The people probably work somewhere so there might be rent cost. They use resources like a pc, this also costs money. Then you might even consider the oportunity cost of these employees not doing other stuff that might make the company more money that this project.
Everything has costs, even if they aren’t obviously monetary.
People’s time is a cost. Resources being used is a cost. Heck, the time you are spending doing the analysis is a cost. Anything being used to this project is something that _can’t_ be used for other projects.
All of those costs can be quantified. If someone making $50k a year has to spend 500 hours on the project, then that costs the company $12,500 in salary costs. If you have a truck that costs $60k and a 10 year depreciation schedule, using it for one year costs the company $6k.
So figure out what resources are going to be used, what those resources cost, and how much of that cost you’ll be using in the project.
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