Benefit-to-Cost Ratio (BCR) and Savings-to-Investment Ratio (SIR)
BCR and SIR are numerical ratios whose size indicates the economic performance of an investment. The BCR is computed as benefits, net of future non-investment costs, divided by investment costs.1 The SIR is savings divided by investment costs. The SIR is the BCR method recast to fit the situation where an investment’s primary advantage is lower costs. SIR is to BCR what NS is to NB.
KeywordsEconomic Evaluation Investment Cost Budget Allocation Equity Fund Total Benefit
Unable to display preview. Download preview PDF.
- American Society for Testing and Materials (ASTM). 1989. Standard Practice for Measuring Ben-efit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems. E 964. Philadelphia: ASTM.Google Scholar
- Au, Tung, and Thomas P. Au. 1983. Engineering Economics for Capital Investment Analysis. Newton, Massachusetts: Allyn and Bacon, Inc.Google Scholar
- Marshall, Harold E., and Rosalie J. Ruegg. 1981. Recommended Practice for Measuring Benefit/ Cost and Savings-to-Investment Ratios for Buildings and Building Systems. NBSIR 81–2397. Gaithersburg, MD: National Bureau of Standards.Google Scholar
- Ruegg, Rosalie T. 1987. Life-Cycle Costing Manual for the Federal Energy Management Program. NBS Handbook 135. Gaithersburg, MD: National Bureau of Standards.Google Scholar
- Saaty, Thomas L. 1988. Multicriteria Decision Making: The Analytic Hierarchy Process. Pittsburgh: University of Pittsburgh Press.Google Scholar