Cost Benefit Ratio Formula

The page provides you the Cost benefit ratio formula to calculate the Benefit-Cost Ratio. It is calculated by dividing discounted value of incremental benefits by discounted value of incremental costs. Just substitute the values of discount rate and the number of years in this BCR Formula to perform calculation. Also this set of Benefit cost ratio formulas has the formulas for calculating total cost, total benefits, discounted cost and discounted benefits.

BCR Formula | Benefit Cost Ratio Formula


Total Costs = 1c ( dcc + idcc)
Total Benefits = 1c ( dbb + idbc)
Discounted Costs = 1c ( dcc + idcc) / (1 + dr/100)c
Discounted Benefits = 1c ( dbc + idbc) / (1 + dr/100)c
Benefit/Cost Ratio = Discounted Benefits / Discounted Costs


dr = Discount Rate
c = Number of Years
dc = Direct Cost
idc = Indirect Cost
db = Direct Benefits
idb = Indirect Benefits

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Benefit Cost Ratio is one of the criteria for project investment. Cost benefit ratio formula is a simple formula that requires only basic addition operation for the calculations.

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