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
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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]."
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Key Findings:
Summarize major insights, including:-
Total benefits.
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Total costs.
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Calculated BCR.
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Recommendations.
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II. INTRODUCTION
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Background of the Project:
Provide context, including:-
Objectives of the project or initiative.
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Relevant stakeholders and their roles.
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Purpose of the Benefit-Cost Ratio (BCR):
Explain the importance of using BCR in decision-making.
III. METHODOLOGY
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Definition of BCR:
Include the formula:BCR=Total BenefitsTotal Costs\text{BCR} = \frac{\text{Total Benefits}}{\text{Total Costs}}BCR=Total CostsTotal Benefits​
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Scope of the Analysis:
Define the parameters, including:-
Timeframe (e.g., [START YEAR] to [END YEAR]).
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Assumptions (e.g., discount rates, inflation rates).
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Data Sources:
List all data inputs and their origins (e.g., market research, historical data, expert opinions).
IV. COST ANALYSIS
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Identification of Costs:
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Capital costs ([SPECIFIC EXAMPLES]).
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Operational and maintenance costs ([SPECIFIC EXAMPLES]).
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Opportunity costs ([SPECIFIC EXAMPLES]).
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Cost Estimation:
Provide detailed calculations and supporting evidence.
V. BENEFIT ANALYSIS
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Identification of Benefits:
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Direct benefits ([SPECIFIC EXAMPLES]).
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Indirect benefits ([SPECIFIC EXAMPLES]).
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Intangible benefits ([SPECIFIC EXAMPLES]).
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Benefit Estimation:
Detail calculations and evidence supporting each benefit.
VI. BENEFIT-COST RATIO CALCULATION
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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]
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Interpretation of Results:
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If BCR > 1: The benefits outweigh the costs, making the project viable.
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If BCR < 1: The costs outweigh the benefits, questioning project feasibility.
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VII. SENSITIVITY ANALYSIS
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Purpose of Sensitivity Analysis:
Discuss how changes in variables (e.g., discount rate, costs, or benefits) affect the BCR.
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Scenarios Evaluated:
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Best-case scenario.
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Worst-case scenario.
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Most likely scenario.
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Results:
Include revised BCRs under each scenario.
VIII. LIMITATIONS AND RISKS
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Limitations of the Analysis:
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Data constraints ([SPECIFIC EXAMPLES]).
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Assumptions made ([SPECIFIC EXAMPLES]).
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Risks:
Discuss potential risks impacting costs or benefits.
IX. CONCLUSIONS AND RECOMMENDATIONS
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Summary of Findings:
Recap the key results, including BCR and sensitivity analysis outcomes.
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Recommendations:
Provide actionable advice based on the analysis.
X. APPENDICES AND REFERENCES
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Appendices:
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Detailed calculations.
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Additional data tables.
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Graphs and charts.
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References:
Cite all data sources and references used in the analysis.