There are several ways to evaluate and compare various options to select the best option going forward. In New Zealand, Waka Katohi (NZTA) requires major transport projects to use their Economic Evaluation Manual (EEM) to guide the evaluation of transport Options. The EEM recommends two key options analysis tools
- Multi-Criteria Analysis (MCA)
- Benefit Cost Ratios (BCR) which are based on the Net Present Value of each options benefits and costs
Generally MCA is used to reduce a long list of transport options to a short list. This Short List is then assessed using Benefit Cost Ratios (BCR) analysis.
The NZTA EEM also requires that identified options include a Do Minimum Option as part of the identification of the Preferred Option.
If you want to know more about how BCRs are calculated I can suggest this site: https://www.indeed.com/career-advice/career-development/cost-benefit-ratio-formula
or if you prefer a simpler introduction to BCR then try this video: https://www.youtube.com/watch?v=3LeV98kPKFk
Finally, a key element of BCR calculation is they adjust the future costs and future benefits using Net Present Value (NPV). This adjusts the price of future costs and benefits to make them more comparable to current costs and benefits.
If you want to know more about how NPVs are calculated I can suggest this site: https://blog.hubspot.com/sales/net-present-value
or if you prefer a simpler introduction to BCR then try this video: https://www.youtube.com/watch?v=7FsGpi_W9XI