Not surprisingly, including this benefit increases the estimated benefit/cost ratio
dramatically, from 3.9 (including the earlier completion benefit and using a discount rate of 5%) to 30.7.
Lord Adonis understood rates of return and benefit/cost ratios
We estimate that the benefit/cost ratio
of the Kodak program is no higher than 0.94, obtained using a discount rate of 3% and assuming students work 900 hours per year.
After yearly benefits and costs had been aggregated from each perspective, net benefits and benefit/cost ratios
Compare this with the financial only evaluation of the electrification of the GWML in a study initially commissioned by the train companies which gave a benefit/cost ratio
ranged from 0.56 to 4.11 with DSS alternatives 1 and 3 being the only alternatives within their class to produce a benefit/cost ratio
greater than 1 for minimum levels of efficiency and effectiveness benefits.
The benefit-cost ratio showed that when the costs of the entire congestion management system (including changeable message signs, traveler information, etc.) are factored in, the benefit/cost ratio
for ramp metering is 5:1.
Given a life span of 20 years, the benefit/cost ratio
for government investment would be 33:1, far in excess of the 1.5:1 norm.
Appended are: (1) Explaining the Results--A Primer: The Net Present Value; The Internal Rate of Return; The Benefit/Cost Ratio
; and The Payback Period; and (2) Methodology for Creating Income Gains by Levels of Education.
User benefits and costs associated with the least-cost improvement are simulated and used to generate an incremental benefit/cost ratio
The value of these options is measured as the net benefit (benefits less life-cycle costs) and their financial efficiency is measured as their benefit/cost ratios
(net benefits divided by investment).
The benefits are presented on three ways: (1) annual benefits; (2) present values of future annual benefits including rates of return and benefit/cost ratios
; and (3) statewide economic benefits including returns to the business community.