Problems
Long-term BCRs, such as those involved in climate change, are very sensitive to the discount rate used in the calculation of net present value, and there is often no consensus on the appropriate rate to use.
The handling of non-monetary impacts also present problems. They are usually incorporated by estimating them in monetary terms, using measures such as WTP (willingness to pay), though these are often difficult to assess. Alternative approaches include the UK's New Approach to Appraisal framework.
A further complication with BCRs concerns the precise definitions of benefits and costs. These can vary depending on the funding agency.
Read more about this topic: Benefit-cost Ratio
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