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Beginner
Basics >
Calculating
an e-Learning Cost Benefit Ratio
by
Kevin Kruse
The cost-benefit
ratio is a simple calculation that depicts the total financial
return for each dollar invested in the training program. The
example that follows is based on a fictitious case of a Web-based
quality training program that cost $54,000 to develop and
deliver, and which saved $430,000 in the first year due to
a reduction in defective widgets. Figure 6.9 details the calculations.
Figure
6.9
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Cost-Benefit
Ratio
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Financial
Benefits ¸ Total Cost of Training = Cost-Benefit
Ratio
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$430,000
¸ $54,000 = 7.96
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Cost-Benefit
Ratio = 7.96
In
other words, for every dollar invested in the training
program it returned almost $8 after one year of use.
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