ASTM E964-15

Standard Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems

SIGNIFICANCE AND USE
5.1 The BCR and SIR provide measures of economic performance in a single number that indicates whether a proposed building or building system is preferred over a mutually exclusive alternative that serves as the base for computing the ratio. It may be contrasted with the life-cycle cost (LCC) method that requires two LCC measures to evaluate the economic performance of a building or building system—one for each alternative.  
5.2 The ratio indicates discounted dollar benefits (or savings) per dollar of discounted costs.  
5.3 The BCR or SIR can be used to determine if a given building or building system is economic relative to the alternative of not having it.  
5.4 The BCR or SIR computed on increments of benefits (or savings) and costs can be used to determine if one design or size of a building or system is more economic than another.  
5.5 The BCR or SIR can be used as an aid to select the economically efficient set of projects among many competing for limited funding. The efficient set of projects will maximize aggregate net benefits or net savings obtainable for the budget.
SCOPE
1.1 This practice covers a procedure for calculating and interpreting benefit-to-cost ratios (BCR) and savings-to-investment ratios (SIR) as an aid for making building-related decisions.  
1.2 A basic premise of the BCR and SIR methods is that future as well as present benefits and costs arising from a decision are important to that decision, and, if measurable in dollars, should be included in calculating the BCR and SIR.  
1.3 Dollar amounts used to calculate BCR and SIR are all discounted, that is, expressed in time-equivalent dollars, either in present value or uniform annual value terms.  
1.4 The values stated in inch-pound units are to be regarded as standard. The values given in parentheses are mathematical conversions to SI units that are provided for information only and are not considered standard.  
1.5 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety and health practices and determine the applicability of regulatory limitations prior to use.

General Information

• Status: Historical
• Publication Date: 30-Apr-2015
• ICS: 91.010.20 - Contractual aspects
• Technical Committee: E06 - Performance of Buildings
• Drafting Committee: E06.81 - Building Economics

Relations

• Replaces: ASTM E964-06(2010) - Standard Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems
• Effective Date: 01-May-2015
• Replaced By: ASTM E964-15(2020)e1 - Standard Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems
• Effective Date: 01-Apr-2020
• Referred By: ASTM E1121-15(2020)e1 - Standard Practice for Measuring Payback for Investments in Buildings and Building Systems
• Effective Date: 01-May-2015
• Referred By: ASTM E1557-09(2020)e1 - Standard Classification for Building Elements and Related Sitework—UNIFORMAT II
• Effective Date: 01-May-2015
• Referred By: ASTM E1185-15(2020)e1 - Standard Guide for Selecting Economic Methods for Evaluating Investments in Buildings and Building Systems
• Effective Date: 01-May-2015
• Referred By: ASTM E3008/E3008M-16(2023) - Standard Classification for Transportation Surface Elements—UNIFORMAT II
• Effective Date: 01-May-2015
• Referred By: ASTM E3130-21 - Standard Guide for Developing Cost-Effective Community Resilience Strategies
• Effective Date: 01-May-2015
• Referred By: ASTM E1074-15(2020)e1 - Standard Practice for Measuring Net Benefits and Net Savings for Investments in Buildings and Building Systems
• Effective Date: 01-May-2015
• Referred By: ASTM E1369-15(2020)e1 - Standard Guide for Selecting Techniques for Treating Uncertainty and Risk in the Economic Evaluation of Buildings and Building Systems
• Effective Date: 01-May-2015
• Referred By: ASTM E1057-15(2020)e1 - Standard Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and Building Systems
• Effective Date: 01-May-2015
• Referred By: ASTM E1765-16(2023) - Standard Practice for Applying Analytical Hierarchy Process (AHP) to Multiattribute Decision Analysis of Investments Related to Projects, Products, and Processes
• Effective Date: 01-May-2015
• Referred By: ASTM E2204-15(2020)e1 - Standard Guide for Summarizing the Economic Impacts of Building-Related Projects
• Effective Date: 01-May-2015
• Referred By: ASTM E2103/E2103M-19 - Standard Classification for Bridge Elements—UNIFORMAT II
• Effective Date: 01-May-2015
• Referred By: ASTM E2506-15(2020)e1 - Standard Guide for Developing a Cost-Effective Risk Mitigation Plan for New and Existing Constructed Facilities
• Effective Date: 01-May-2015
• Referred By: ASTM E917-17(2023) - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
• Effective Date: 01-May-2015

Standards Content (Sample)

NOTICE: This standard has either been superseded and replaced by a new version or withdrawn.
Contact ASTM International (www.astm.org) for the latest information
Designation:E964 −15
Standard Practice for
Measuring Benefit-to-Cost and Savings-to-Investment Ratios
1
for Buildings and Building Systems
This standard is issued under the fixed designation E964; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
INTRODUCTION
This is one in a series of practices for applying economic evaluation methods to building-related
decisions. Methods covered by this practice are benefit-to-cost ratio (BCR) and savings-to-investment
ratio (SIR). These are members of a family of economic evaluation methods that can be used to
measure the economic consequences of a decision over a specified period of time. The BCR is used
when the focus is on benefits (that is, advantages measured in dollars) relative to project costs. The
SIR, a variation of the BCR, is used when the focus is on project savings (that is, cost reductions)
relative to project costs.The family of methods includes, in addition to BCR and SIR, net benefits, net
savings, life-cycle cost, internal rate-of-return, adjusted internal rate-of-return, and payback (see
Practices E917, E1057, E1074, and E1121). Guide E1185 directs you to the appropriate method for
a particular economic problem.
BCR and SIR are numerical ratios that indicate the economic performance of a project by the size
oftheratio.Aratiolessthan1.0indicatesaprojectthatisuneconomic,aratioof1.0indicatesaproject
whose benefits or savings just equal its costs, and a ratio greater than 1.0 indicates a project that is
economic. While it is straightforward to use ratios to determine whether a given project is economic
or uneconomic, care must be taken to correctly interpret ratios when using them to choose among
alternative designs and sizes of a project, or to assign priority to projects competing for limited funds.
1. Scope 1.5 This standard does not purport to address all of the
safety concerns, if any, associated with its use. It is the
1.1 This practice covers a procedure for calculating and
responsibility of the user of this standard to establish appro-
interpreting benefit-to-cost ratios (BCR) and savings-to-
priate safety and health practices and determine the applica-
investment ratios (SIR) as an aid for making building-related
bility of regulatory limitations prior to use.
decisions.
1.2 A basic premise of the BCR and SIR methods is that 2. Referenced Documents
future as well as present benefits and costs arising from a
2
2.1 ASTM Standards:
decision are important to that decision, and, if measurable in
E631 Terminology of Building Constructions
dollars, should be included in calculating the BCR and SIR.
E833 Terminology of Building Economics
1.3 Dollar amounts used to calculate BCR and SIR are all E917 Practice for Measuring Life-Cycle Costs of Buildings
discounted, that is, expressed in time-equivalent dollars, either
and Building Systems
in present value or uniform annual value terms.
E1057 Practice for Measuring Internal Rate of Return and
Adjusted Internal Rate of Return for Investments in
1.4 The values stated in inch-pound units are to be regarded
Buildings and Building Systems
as standard. The values given in parentheses are mathematical
E1074 Practice for Measuring Net Benefits and Net Savings
conversions to SI units that are provided for information only
for Investments in Buildings and Building Systems
and are not considered standard.
E1121 Practice for Measuring Payback for Investments in
Buildings and Building Systems
1
This practice is under the jurisdiction of ASTM Committee E06 on Perfor-
mance of Buildings and is the direct responsibility of Subcommittee E06.81 on
2
Building Economics. For referenced ASTM standards, visit the ASTM website, www.astm.org, or
Current edition approved May 1, 2015. Published June 2015. Originally contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM
approved in 1983. Last previous edition approved in 2010 as E964 – 06 (2010). Standards volume information, refer to the standard’s Document Summary page on
DOI: 10.1520/E0964-15. the ASTM website.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
1

---------------------- Page: 1 ----------------------
E964−15
E1185 Guide for Selecting Economic Methods for Evaluat- 5.4 TheBCRorSIRcomputedonincrementsofbenefits(or
ing Investments in Buildings and Building Systems savings) and costs can be used to determine if one design or
E1369 Guide for Selecting Techniques for Treating Uncer- size of a building or system is more economic than another.
tainty and Risk in the Economic Evaluation of
...

This document is not an ASTM standard and is intended only to provide the user of an ASTM standard an indication of what changes have been made to the previous version. Because
it may not be technically possible to adequately depict all changes accurately, ASTM recommends that users consult prior editions as appropriate. In all cases only the current version
of the standard as published by ASTM is to be considered the official document.
Designation: E964 − 06 (Reapproved 2010) E964 − 15
Standard Practice for
Measuring Benefit-to-Cost and Savings-to-Investment Ratios
1
for Buildings and Building Systems
This standard is issued under the fixed designation E964; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
INTRODUCTION
This is one in a series of practices for applying economic evaluation methods to building-related
decisions. Methods covered by this practice are benefit-to-cost ratio (BCR) and savings-to-investment
ratio (SIR). These are members of a family of economic evaluation methods that can be used to
measure the economic consequences of a decision over a specified period of time. The BCR is used
when the focus is on benefits (that is, advantages measured in dollars) relative to project costs. The
SIR, a variation of the BCR, is used when the focus is on project savings (that is, cost reductions)
relative to project costs. The family of methods includes, in addition to BCR and SIR, net benefits, net
savings, life-cycle cost, internal rate-of-return, adjusted internal rate-of-return, and payback (see
Practices E917, E1057, E1074, and E1121). Guide E1185 directs you to the appropriate method for
a particular economic problem.
BCR and SIR are numerical ratios that indicate the economic performance of a project by the size
of the ratio. A ratio less than 1.0 indicates a project that is uneconomic, a ratio of 1.0 indicates a project
whose benefits or savings just equal its costs, and a ratio greater than 1.0 indicates a project that is
economic. While it is straightforward to use ratios to determine whether a given project is economic
or uneconomic, care must be taken to correctly interpret ratios when using them to choose among
alternative designs and sizes of a project, or to assign priority to projects competing for limited funds.
1. Scope
1.1 This practice covers a procedure for calculating and interpreting benefit-to-cost ratios (BCR) and savings-to-investment
ratios (SIR) as an aid for making building-related decisions.
1.2 A basic premise of the BCR and SIR methods is that future as well as present benefits and costs arising from a decision are
important to that decision, and, if measurable in dollars, should be included in calculating the BCR and SIR.
1.3 Dollar amounts used to calculate BCR and SIR are all discounted, that is, expressed in time-equivalent dollars, either in
present value or uniform annual value terms.
1.4 The values stated in inch-pound units are to be regarded as standard. The values given in parentheses are mathematical
conversions to SI units that are provided for information only and are not considered standard.
1.5 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility
of the user of this standard to establish appropriate safety and health practices and determine the applicability of regulatory
limitations prior to use.
2. Referenced Documents
2
2.1 ASTM Standards:
E631 Terminology of Building Constructions
E833 Terminology of Building Economics
1
This practice is under the jurisdiction of ASTM Committee E06 on Performance of Buildings and is the direct responsibility of Subcommittee E06.81 on Building
Economics.
Current edition approved Oct. 1, 2010May 1, 2015. Published November 2010June 2015. Originally approved in 1983. Last previous edition approved in 20062010 as
ε1
E964 – 06 (2010). . DOI: 10.1520/E0964-06R10.10.1520/E0964-15.
2
For referenced ASTM standards, visit the ASTM website, www.astm.org, or contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM Standards
volume information, refer to the standard’s Document Summary page on the ASTM website.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
1

---------------------- Page: 1 ----------------------
E964 − 15
E917 Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
E1057 Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and
Building Systems
E1074 Practice for Measuring Net Benefits and Net Savings for Investments in Buildings and Building Systems
E1121 Practice for Measuring Payback for Investments in Buildings and Building Systems
...