The Front Line Guide to Thinking Clearly

Thinking Clearly

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Two Other Analytic Approaches

Cost-benefit analysis is another way of calculating risk and

return, validating the predictions that your ability to think

clearly have produced, and predicting the point at which

investments will be recouped. This kind of analysis can

become complicated if it involves complex financial transac-

tions and assigning values to intangibles (such as positive

attitudes, smog-free air, or pending legislation). The math for

simple situations isn’t demanding, and you can assign dollar

value for any projects being considered.

A related technique involves identifying and setting tar-

gets for reducing ...