ABSTRACT
Cost ratios, indices, and metrics are commonly used in the financial sector to convey the health of a company from both strategic and operational perspectives. The ratios capture both the performance and activity of a company. Engineering projects often use simple metrics as a way to understand the worth or return for a project. These ratios can play an important role in portfolio analysis, marketing a project, strategic investments, conveying non-economic value, and so on. This chapter presents the major cost ratios used for projects analysis, including cost-benefit analysis and return on investment. Other measures of performance, including payback period, internal rate of return, and breakeven analysis, are also discussed. Unfortunately, the kind of life cycle cost analysis that engineers should be conducting does not translate to simple ratios and metrics.
