Where Bt denotes benefits in year t; Ct denotes cost in year
t; r denotes cost of capital; t denotes number of years.
The decision rule is that we accept the project if BCR ≥ 1
when the cost and benefit streams are discounted at the opportunity
cost of capital. Thus, if BCR > 1 it implies that Fruit juice processing is profitable, if BCR < 1it implies not profitable and if BCR = 1, the investment break even (Gittinger,
1996).