Question

List five (5) reasons on the need to consider the benefit to cost ratio instead of mainly the profit being made by a particular investment.

Answer 1

Benefit to cost ratio is considered important as it is used as techniques to justify project feasibility, its cost and profit from these projects. only considering profit may not justify that project will not incur extra cost. so cost and benefits to be analyzed time to time instead of profit alone.  there are no of reason that allow the benefits to cost ratio is important than profit alone.

1. To evaluate and justify whether a capital investment is worth it to be taken in hand.
2. To decide whether to hire new employees to implement, manage and organize the project.
3. To determine whether a project or operating change is feasible.
4. To develop a standard / benchmark for comparing projects and their benefits too.
5. To establish goals for the project itself, that might include time, productivity or cost restraints on a project.