Cost-benefit analysis calculator

How it works

BCR = present value of benefits ÷ present value of costs · 1.0 is the decision boundary

Both sides are discounted over the horizon, which is what separates this from subtracting two totals. A ratio above 1.0 means the benefits carry the costs at the rate you set; below 1.0 they do not. The ratio is more useful than the net figure when you are comparing projects of different sizes, and the net figure is more useful when you are deciding whether to do one at all — which is why both are here.

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Frequently asked questions

How do I value a benefit that is not money?

Price the thing it replaces. Time saved is hours times a loaded hourly cost; avoided downtime is the revenue that would have been lost. If you genuinely cannot price it, keep it out of the ratio and note it beside the result.

What does a BCR of exactly 1 mean?

The project breaks even at your discount rate. It is not free money and not a loss, so the decision falls to whatever you did not manage to quantify.

Ratio or net benefit?

Ratio when ranking projects against a limited budget, net benefit when deciding on one in isolation. A small project can have a superb ratio and move nothing.

What if benefits start late?

This assumes they start in year one. If they ramp, use a lower average annual benefit or shorten the horizon — otherwise the result is optimistic.