Compute Benefit Cost Ratio

If the benefit cost ratio of a project is greater than one, its benefits outweigh its costs.

If there are multiple project proposals, computing each project's benefit cost ratio can rank the projects by those that have the most benefits relative to costs.

Risks can be incorporated into costs using probabilities.

The discount rate is the estimated rate of return if the money were to be invested instead of spent and is used to estimate how much money you need now in order to have a certain amount of money in the future.