COST-BENEFIT RATIO - CBR

CBR is an evaluation criterion of acceptability and/or preferability of a project. It is calculated as the ratio of benefits to costs. According to this criterion a project is desirable if the present CBR is greater than one. Among multiple projects, the one that has a higher CBR will be preferred.
This ratio presents some operational benefits, mainly because it is quick and easy to calculate and it represents a ratio between two values; therefore, BCR is useful in pointing out some features of the project structure. However, its application has a relevant inconvenience: BCR is highly sensitive to the definition of cost and benefit entries. Alternative assembling of costs and benefits results in considerably different values.

Editor: Carmen NOTARO 
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