Which method is often used in municipal project evaluations where benefits and costs accrue to different segments of the community?

The benefit-cost ratio is a method frequently utilized in municipal project evaluations because it provides a comprehensive framework for assessing projects where the benefits and costs affect various segments of the community. This ratio compares the total expected benefits of a project to its total expected costs, allowing decision-makers to see whether the economic benefits justify the expenses involved.

In the context of municipal projects, different community segments may experience distinct benefits, such as improved public services or infrastructure, and the costs may also be distributed unevenly. The benefit-cost ratio quantifies these disparate impacts, making it easier for municipalities to evaluate overall project feasibility and prioritize investments that generate the most substantial net benefits for the community as a whole.

Other methods, although useful in specific contexts, may not capture the community-wide perspective as effectively. For example, the annual cost method focuses primarily on quantifying costs rather than directly comparing them to benefits. The rate of return method evaluates the profitability of investments but may not clearly address broader community impacts. The EUAC (Equivalent Uniform Annual Cost) method is mainly concerned with the cost side and does not facilitate a direct assessment of benefits. Therefore, the benefit-cost ratio stands out as a suitable method for the complexities involved in municipal project evaluations.