If the benefit-cost ratio (BCR) is greater than 1, what does this generally indicate about the project?

• A. It indicates that costs exceed benefits
• B. It has no relation to feasibility
• C. It indicates that benefits exceed costs
• D. It only applies to short-term projects

Answer: (C)

The main idea is how the benefit-cost ratio (BCR) signals whether a project is economically worthwhile. The BCR compares the present value of expected benefits to the present value of costs. When this ratio is greater than 1, the benefits exceed the costs, meaning the project is financially favorable or feasible on economic grounds. It indicates that, overall, the investment would deliver more value than it consumes. It does not mean costs exceed benefits, it does relate to feasibility in a typical evaluation, and it isn’t limited to short-term projects. So, the statement that benefits exceed costs best describes what a BCR greater than 1 implies.