DEFINITION of 'Benefit Cost Ratio  BCR'
A ratio attempting to identify the relationship between the cost and benefits of a proposed project. Benefit cost ratios are most often used in corporate finance to detail the relationship between possible benefits and costs, both quantitative and qualitative, of undertaking new projects or replacing old ones.
BREAKING DOWN 'Benefit Cost Ratio  BCR'
As mentioned, the ratio is used to measure both quantitative and qualitative factors, since sometimes benefits and costs cannot be measured exclusively in financial terms. In cases where at all possible however, qualitative factors should be translated to quantitative terms in order for the results to be easily understandable and tangible.

Profitability Index Rule
A regulation for evaluating whether to proceed with a project ... 
Shadowing
The process of creating values for variables that don't rely ... 
Present Value  PV
The current worth of a future sum of money or stream of cash ... 
Future Value  FV
The value of an asset or cash at a specified date in the future ... 
Internal Rate Of Return  IRR
A metric used in capital budgeting measuring the profitability ... 
Net Present Value  NPV
The difference between the present values of cash inflows and ...

Fundamental Analysis
Ratio Analysis Tutorial
If you don't know how to evaluate a company's present performance and its possible future performance, you need to learn how to analyze ratios. 
Investing Basics
Calculating The Present And Future Value Of Annuities
At some point in your life, you may have had to make a series of fixed payments over a period of time  such as rent or car payments  or have received a series of payments over a period of time, ... 
Technical Indicators
Key Financial Ratios to Analyze Investment Banks
Find out which financial ratios are most useful when analyzing an investment bank, and why tracking capital efficiency is especially important. 
Fundamental Analysis
Understanding the Internal Rate of Return Rule
The internal rate of return rule is a popular method used to compare investments or projects. 
Term
How Equity Capital Markets Work
An equity capital market is a market existing between companies and financial institutions that raises money for the companies. 
Economics
How to Do a CostBenefit Analysis
The benefits of a given situation or businessrelated action are summed and then the costs associated with taking that action are subtracted. 
Economics
Modified Internal Rate of Return (MIRR)
Modified internal rate of return (MIRR) is a variant of the more traditional internal rate of return calculation. 
Fundamental Analysis
Understanding the Capital Adequacy Ratio
The capital adequacy ratio (CAR) is an international standard that measures a bank’s risk of insolvency from excessive losses. Currently, the minimum acceptable ratio is 8%. Maintaining an acceptable ... 
Investing
Additional PaidIn Capital
Additional paidin capital is an account in the equity section of a balance sheet. It represents the additional amount paid for the company’s shares over the par value of the shares. Additional ... 
Fundamental Analysis
Capital Budgeting
Capital budgeting is a planning process used by companies to evaluate which large projects to invest in, and how to finance them. It is sometimes called “investment appraisal.”

What is the formula for calculating weighted average cost of capital (WACC) in Excel?
When analyzing different financing options, companies need to look at how much it will cost to fund operations. There are ... Read Full Answer >> 
What is the difference between calledup share capital and paidup share capital?
The difference between calledup share capital and paidup share capital is investors have already paid in full for paidup ... Read Full Answer >> 
How does additional paid in capital affect retained earnings?
Both additional paidin capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >> 
What types of capital are not considered share capital?
The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >> 
What is the difference between issued share capital and subscribed share capital?
The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >> 
What is the formula for calculating working capital in Excel?
Working capital is used in fundamental analysis to determine a company's financial health and efficiency in the shortterm. ... Read Full Answer >>