Engineering Economics

Benefit-Cost Ratio

The equivalent worth of a public project’s benefits divided by its costs; 1.0 or more is acceptable.

Public agencies compare projects by dividing the present (or annual) worth of the benefits to users by the present (or annual) worth of the costs, both at the same interest rate. A ratio of at least 1.0 means the project returns at least what it costs.

Choosing between two acceptable projects needs the incremental ratio: the extra benefit over the extra cost of the more expensive one. A project can have the higher overall ratio and still not be the better choice, and the exam builds questions on exactly that.

How much of the FE Civil exam is Engineering Economics?