Free Benefit-Cost Ratio Outline Template

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Free Benefit-Cost Ratio Outline Template

Benefit-Cost Ratio Outline

Prepared by: [YOUR NAME]

This outline provides a comprehensive framework for calculating and analyzing the Benefit-Cost Ratio (BCR) for projects, policies, or initiatives. It is designed to ensure clarity and precision while covering all essential components of a cost-benefit analysis.


I. EXECUTIVE SUMMARY

  • Purpose of the Analysis:
    Briefly state the objective of the analysis.


    Example: "The purpose of this analysis is to evaluate the feasibility and value of [PROJECT NAME], proposed by [YOUR COMPANY NAME]."

  • Key Findings:
    Summarize major insights, including:

    • Total benefits.

    • Total costs.

    • Calculated BCR.

    • Recommendations.


II. INTRODUCTION

  • Background of the Project:
    Provide context, including:

    • Objectives of the project or initiative.

    • Relevant stakeholders and their roles.

  • Purpose of the Benefit-Cost Ratio (BCR):
    Explain the importance of using BCR in decision-making.


III. METHODOLOGY

  • Definition of BCR:
    Include the formula:

    BCR=Total BenefitsTotal Costs\text{BCR} = \frac{\text{Total Benefits}}{\text{Total Costs}}BCR=Total CostsTotal Benefits​

  • Scope of the Analysis:
    Define the parameters, including:

    • Timeframe (e.g., [START YEAR] to [END YEAR]).

    • Assumptions (e.g., discount rates, inflation rates).

  • Data Sources:
    List all data inputs and their origins (e.g., market research, historical data, expert opinions).


IV. COST ANALYSIS

  • Identification of Costs:

    • Capital costs ([SPECIFIC EXAMPLES]).

    • Operational and maintenance costs ([SPECIFIC EXAMPLES]).

    • Opportunity costs ([SPECIFIC EXAMPLES]).

  • Cost Estimation:
    Provide detailed calculations and supporting evidence.


V. BENEFIT ANALYSIS

  • Identification of Benefits:

    • Direct benefits ([SPECIFIC EXAMPLES]).

    • Indirect benefits ([SPECIFIC EXAMPLES]).

    • Intangible benefits ([SPECIFIC EXAMPLES]).

  • Benefit Estimation:
    Detail calculations and evidence supporting each benefit.


VI. BENEFIT-COST RATIO CALCULATION

  • BCR Formula Application:
    Show the complete calculation using estimated figures.


    Example:

    \text{BCR} = \frac{\text{Total Benefits of [PROJECT NAME] (e.g., $**[X]**)}}{\text{Total Costs (e.g., $**[Y]**)}} = [BCR VALUE]

  • Interpretation of Results:

    • If BCR > 1: The benefits outweigh the costs, making the project viable.

    • If BCR < 1: The costs outweigh the benefits, questioning project feasibility.


VII. SENSITIVITY ANALYSIS

  • Purpose of Sensitivity Analysis:
    Discuss how changes in variables (e.g., discount rate, costs, or benefits) affect the BCR.

  • Scenarios Evaluated:

    • Best-case scenario.

    • Worst-case scenario.

    • Most likely scenario.

  • Results:
    Include revised BCRs under each scenario.


VIII. LIMITATIONS AND RISKS

  • Limitations of the Analysis:

    • Data constraints ([SPECIFIC EXAMPLES]).

    • Assumptions made ([SPECIFIC EXAMPLES]).

  • Risks:
    Discuss potential risks impacting costs or benefits.


IX. CONCLUSIONS AND RECOMMENDATIONS

  • Summary of Findings:
    Recap the key results, including BCR and sensitivity analysis outcomes.

  • Recommendations:
    Provide actionable advice based on the analysis.


X. APPENDICES AND REFERENCES

  • Appendices:

    • Detailed calculations.

    • Additional data tables.

    • Graphs and charts.

  • References:
    Cite all data sources and references used in the analysis.

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