Life-Cycle Costing

A Primer

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100 pages
This primer – about a hundred pages in length - can serve as a handy guide to help you get a solid hold on the concepts of Life-Cycle Costing Analysis (LCCA or simply LCC).
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Dedicated, driven, goal-oriented, doctoral degree holder (Industrial Ecology, Norway), with two Master’s degrees (Industrial Ecology, Germany-Singapore; Mechanical Engineering, India), and professionally useful diplomas, diverse work experience as researcher in industrial ecology, sustainable developm...


This primer – about a hundred pages in length - can serve as a handy guide to help you get a solid hold on the concepts of Life-Cycle Costing Analysis (LCCA or simply LCC). Students of engineering will at once recognize the importance of this weapon in their armory, when you will, almost certainly, be handling ‘sustainability-related’ issues in your career.

About the author

G. Venkatesh, ME, MSc, PhD, born on 13/01/72 in Chennai (India), is Associate Professor at the Department of Chemical and Engineering Sciences, Faculty of Health, Science and Technology, Karlstad University, KARLSTAD, Sweden. Prior to this publication, he has published ABC of Sustainable Development and Environmental LCA – A primer, with BookBoon; and Water for all and other poems, with Cyberwit (India).

  • Foreword
  • Preface
  • List of figures
  • List of tables
  1. Concepts of LCC
    1. The heart and soul of LCC
    2. Drivers and benefits
    3. Think ‘systems’ whenever possible
    4. Exercise
  2. Time value of money
    1. The purpose of investments
    2. Time is money
    3. Cost of capital
    4. Interest rate and discount rate
    5. Future and present values
    6. Continuous cash flows
    7. Exercise
  3. Cost categories and data acquisition
    1. Cost categories
    2. Depreciation – what and how
    3. Estimating costs
    4. Sensitivity analysis (of life-cycle costs to data elements)
    5. Uncertainty analysis – an example
    6. Exercise
  4. Service life
    1. Calculating annualised capital cost
    2. Calculating annualised maintenance expenses
    3. Determining service life from the curves of the annualised costs
    4. Replacement or retention
    5. Chain method of comparing lifetimes
    6. Exercise
  5. Payback period
    1. Simple payback
    2. Payback with inflation
    3. Discounted payback (no inflation)
    4. True payback (discounting and inflation)
    5. Break-even analysis
    6. Exercise
  6. Ranking of projects
    1. Modes of ranking
    2. Internal Rate of Return (IRR)
    3. Exercise
  • Appendix 1. Glossary of useful terms
  • Appendix 2. Numerical exercises
  • Appendix 3. Sample examination paper – Test yourself
  • Appendix 4. Answers to selected exercises from Appendix 2
  • About the author (in 2018)
  • Endnotes