Question
The Benefit-Cost Ratio (BCR) is a financial metric that is widely used in cost-benefit analysis to evaluate the overall value for money of a project. It is calculated by dividing the discounted value of benefits by the discounted value of costs. A BCR greater than 1 indicates that the project's benefits outweigh its costs, suggesting good value for money. Conversely, a BCR less than 1 suggests that the project's costs outweigh its benefits, indicating poor value for money. Therefore, BCR serves as a useful tool in decision-making, helping to identify and prioritize projects that offer the highest return on investment.
This question was asked on:
Using this slide, set the framework, decide on costs benefits, determine and categorize, project, monetize and discount costs and benefits, compute net present values, run sensitivity analysis and propose a recommendation. With this slide, you can compare aggregate costs and benefits. Remember that the results of the aggregate costs and benefits analysis should be compared quantitatively to see if the benefits outweigh the costs. Summarize the overall value for money of a project or proposal with this slide which helps to calculate Benefit-Cost Ratio (BCR). The formula is as follows: BCR = Discounted value of benefits/ Discounted value of costs.
Receive new free presentations every Monday to your inbox.
Full content, complete versions — No credit card required.
