The BCR is a ratio of a project’s discounted benefits to its discounted costs. The higher the BCR, the better it is. It is also called Benefit-Cost Ratio or Benefit to Cost Ratio. The benefit-cost ratio formula is calculated as follows: BCR = Discounted value of benefits/ discounted value of costs.
The benefit-cost ratio formula is used to compare the discounted values of the benefits and costs of a project. The BCR ratio ranges from 0 (no benefits to charges) to infinity (benefits exceed costs). Can easily manipulate BCR formula to compare alternative tasks so that the highest ratio prevails.
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