Quick Benefit Cost Analysis

Some of you expressed interest in an Excel Benefit Cost Analysis (BCA) calculator I have. This program will discount future costs and benefits and give you the net present value (NPV) and Benefit Cost Ratio (BCR). This follows Mungers chapters on Discounting.

If you want of copy of this calculator to do you policy analysis paper, email me and I will send it to you. derekjohnson@cc.usu.edu

A few rules of thumb: in general for a program to break even its BCR needs to = 1 and for it to make money it needs to be > 1. The NPV must be positive to make money. The greater the NPV the more money you make or save.

The tricky part is deciding on an interest rate - Munger covers this in his chapters. But if you stick around 5-7% you should come up with a fairly conservative estimate. Also, leave the inflation box empty.

This tool is to help you evaluate the feasibility of programs not calculate your mortgage.

Also, if anyone is interested in the equations behind this calculator I can email them.

This calculator was created by Nicole McCoy PhD.