A12.4 - Target incremental BCR

Target incremental BCR

The analyst shall choose and report the target incremental BCR used when undertaking incremental analysis of project options. Where the selected target incremental ratio differs to the guidance below, the analyst must provide a detailed explanation supporting the chosen value. The following guidance is provided:

1. The minimum incremental BCR shall be 1.0, in order to ensure that a higher cost project option is more efficient than a lower cost option.
2. Where the BCR of the preferred option is greater than 2.0 but less than 4.0, the target incremental BCR shall be 2.0.
3. Where the BCR of the preferred option is greater than or equal to 4.0, the target incremental BCR shall be 4.0.