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Hello Sir,
Can you please explain me the concept of financial benefits? How do you tend to know the categorization of a certain benefit as financial/observable benefit?
Thank you.
A financial benefit immediately presents itself in terms of money. For example a new IT system might allow two fewer staff to be employed somthe benefit is two salaries saved.
Non-financial benefits do not present themselves in money. So,the IT system might lead to better service and increased cuctomer satisfaction. However, to balance costs and benefits an attempt hasmto be made,to express all benefits in money so some sort of estimate is made to quantify and evaluate non-financial benefits.
You see these problems in not for profit organisations. Eg a,hospital,can install a new MRI scanner, or install a new operating theatre. To decide which, an attempt is often made to quantify the two sets of benefit to help make the decision.
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