benefit-cost ratio
The Benefit-Cost Ratio (BCR) is a financial metric used to evaluate the efficiency of an investment. It compares the total benefits of a project or decision to its total costs. A BCR greater than 1 indicates that the benefits exceed the costs, suggesting a worthwhile investment. Conversely, a BCR less than 1 means the costs outweigh the benefits, signaling that the investment may not be advisable. BCR helps individuals and organizations make informed choices, ensuring resources are allocated to projects that offer the greatest return on investment.
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The benefit-cost ratio (BCR) is a financial metric used to evaluate the profitability of an investment or project. It compares the total expected benefits of a project to its total costs. A BCR greater than 1 indicates that the benefits outweigh the costs, making the project worthwhile. Conversely, a BCR less than 1 suggests that costs exceed benefits, signaling that the project may not be a good investment. Essentially, it helps decision-makers determine whether the economic advantages of a project justify the expenses involved.