About Benefit to Cost Ratio Calculator (Formula)
The Benefit to Cost Ratio (BCR) Calculator is a tool used to evaluate the financial viability of a project or investment by comparing the total monetary benefit to the total cost.
The formula for calculating the Benefit to Cost Ratio is:
BCR = Total Monetary Benefit / Total Cost
In this formula, “Total Monetary Benefit” refers to the sum of all monetary gains or benefits associated with the project or investment, and “Total Cost” represents the overall cost incurred to implement or undertake the project.
By dividing the total monetary benefit by the total cost, the BCR indicates the relationship between the financial returns and the investment made. A BCR greater than 1 suggests that the project generates more benefits than the cost incurred, indicating a potentially profitable venture. On the other hand, a BCR less than 1 indicates that the project’s benefits are insufficient to cover the costs, suggesting a less favourable investment.
The Benefit to Cost Ratio Calculator provided here allows you to input the total monetary benefit and total cost. It automatically calculates the BCR for you. The result is displayed with a precision of two decimal places, indicating the ratio of benefit to cost.
This calculator is commonly used in financial analysis, project evaluation, and investment decision-making processes, helping individuals and businesses assess the financial feasibility and profitability of various initiatives.