What is cost benefit ratio?

Cost Benefit Ratio is the ratio of the benefits from a project to its cost in monetary terms. 

It is a common term used in cost benefit analysis, which is nothing but an analysis of a project in terms of costs incurred and benefits realized.

Or, value of money for any project or proposal and this applies not only in analyzing big corporate projects but in our daily and day to day life as well.

Cost Benefit Analysis

Let’s Understand this with Simple example:-

You went to buy a T.V. set  in a shop and at the same time, the same  T.V. set is available at lower price in another shop which is 15 kms away from there.

As a normal person what would you do?

You will think that whether the discount which you can get is worth enough to travel all the way and avail that discount?

This analysis which we do number of times in our daily life  is nothing but cost to benefit analysis. We are doing nothing but analysing the cost which we are incurring to enjoy that benefit and is it worth investing that cost or not.

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