Traditional Algorithm for BCR Incremental Analysis Most textbooks are reasonably consistent with the manner they present BCR incremental analysis. Following is an algorithm to carry out incremental BCR analysis as taught in traditional textbooks:
1. Identify all relevant alternatives
2. Calculate the B/C ratio of each alternative
3. Rank-order the projects
4. Identify the increment under consideration
5. Calculate the B/C ratio for the incremental cash flows
6. Use the incremental B/C ratio to decide which alternative is better
7. Iterate step 4 until all increments have been considered
8. Select the best alternative from the set of mutually exclusive competing projects.