The document describes the steps to compare mutually exclusive alternatives using the benefit-cost ratio method. It involves 1) ranking alternatives by increasing total equivalent costs, 2) calculating the B-C ratio for the lowest cost alternative and selecting it if the ratio is greater than or equal to 1, 3) determining the incremental B-C ratio between the next alternative and baseline and selecting it if the ratio is greater than or equal to 1, and repeating this process until all alternatives have been compared.
The document describes the steps to compare mutually exclusive alternatives using the benefit-cost ratio method. It involves 1) ranking alternatives by increasing total equivalent costs, 2) calculating the B-C ratio for the lowest cost alternative and selecting it if the ratio is greater than or equal to 1, 3) determining the incremental B-C ratio between the next alternative and baseline and selecting it if the ratio is greater than or equal to 1, and repeating this process until all alternatives have been compared.
The document describes the steps to compare mutually exclusive alternatives using the benefit-cost ratio method. It involves 1) ranking alternatives by increasing total equivalent costs, 2) calculating the B-C ratio for the lowest cost alternative and selecting it if the ratio is greater than or equal to 1, 3) determining the incremental B-C ratio between the next alternative and baseline and selecting it if the ratio is greater than or equal to 1, and repeating this process until all alternatives have been compared.
The document describes the steps to compare mutually exclusive alternatives using the benefit-cost ratio method. It involves 1) ranking alternatives by increasing total equivalent costs, 2) calculating the B-C ratio for the lowest cost alternative and selecting it if the ratio is greater than or equal to 1, 3) determining the incremental B-C ratio between the next alternative and baseline and selecting it if the ratio is greater than or equal to 1, and repeating this process until all alternatives have been compared.
B/C Ratio Method When comparing mutually exclusive alternatives with the B-C ratio method the following steps should be considered: 1. The alternatives are ranked first in order of increasing total equivalent worth of costs (PW, AW, or FW). The do-nothing alternative is selected as a base alternative. B/C Ratio Method 2. The B-C ratio is then calculated for the alternative having the lowest equivalent cost. It is greater than or equal to 1.0, then it will be the new alternative; otherwise, do-nothing remains as the base alternative.
3. The next least equivalent cost alternative is the
selected, and determine the incremental B-C ratio (∆B/ ∆C) between this alternative and baseline. B/C Ratio Method 4. If (∆B/∆C) ≥ 1.0 , the next higher equivalent becomes the new baseline; otherwise the last baseline alternative is maintained.
5. The incremental B-C ratios are determined for each
successively higher equivalent cost alternative until the last alternative has been compared.