COST-BENEFI T ANALYSIS Flashcards
ratio method involves the calculation of a ratio of
benefits to costs.
B–C ratio
actually a ratio of discounted benefits to discounted costs.
B–C ratio
defined as the ratio of the equivalent worth of benefits to the equivalent worth of costs.
B–C ratio
The equivalent-worth
measure applied can be
present worth, annual worth, or future
worth, but customarily, either PW or AW is used.
are defined as the favorable consequences of the project to the public
Project benefits
represent the monetary disbursement(s) required of the government
Project costs
The method of selecting alternatives that is commonly used by
government agencies for analysing the desirability of public projects
benefit/cost ratio (B/C ratio).
A B/C ratio greater than or equal to
1.0
indicated that the project under construction is economically advantageous.
are defined as the favorable consequences of the project to the
public,
Project benefits
represent the monetary disbursement(s) required of the
government.
project costs
generally used to represent the
negative consequences of a project to the public.
term disbenefits
