What is the assessment tool used to analyze if investments are justified by the potential solutions?

The assessment tool that effectively analyzes whether investments are justified by the potential solutions is a Cost-Benefit Analysis. This tool systematically evaluates the financial implications of proposed solutions by comparing the expected costs to the anticipated benefits. It provides a clear picture of the economic viability of an investment, allowing stakeholders to make informed decisions based on quantifiable data.

In conducting a Cost-Benefit Analysis, analysts identify all relevant costs associated with a solution, such as implementation expenses, operational costs, and any potential risks that could incur additional costs. They simultaneously assess the benefits, which may include increased revenue, cost savings, or improved efficiency. The result is a ratio or a value that indicates whether the benefits outweigh the costs, guiding decision-makers in justifying investments.

While other tools like Return on Investment Calculation focus on the profitability aspect and Feasibility Analysis evaluates whether a project can be successfully executed, Cost-Benefit Analysis specifically aims to establish a comprehensive comparison between costs and benefits. The Approvals Checklist, on the other hand, serves as a procedural guide rather than an analytical tool for justifying investments. Thus, Cost-Benefit Analysis stands out as the most appropriate choice for assessing the justification of investments related to potential solutions.