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Life-Cycle Costing

A Primer

Language:  English
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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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
  2. The heart and soul of LCC
  3. Drivers and benefits
  4. Think ‘systems’ whenever possible
  5. Exercise
  6. =Time value of money
  7. The purpose of investments
  8. Time is money
  9. Cost of capital
  10. Interest rate and discount rate
  11. Future and present values
  12. Continuous cash flows
  13. Exercise
  14. =Cost categories and data acquisition
  15. Cost categories
  16. Depreciation – what and how
  17. Estimating costs
  18. Sensitivity analysis (of life-cycle costs to data elements)
  19. Uncertainty analysis – an example
  20. Exercise
  21. =Service life
  22. Calculating annualised capital cost
  23. Calculating annualised maintenance expenses
  24. Determining service life from the curves of the annualised costs
  25. Replacement or retention
  26. Chain method of comparing lifetimes
  27. Exercise
  28. =Payback period
  29. Simple payback
  30. Payback with inflation
  31. Discounted payback (no inflation)
  32. True payback (discounting and inflation)
  33. Break-even analysis
  34. Exercise
  35. =Ranking of projects
  36. Modes of ranking
  37. Internal rate of return (IRR)
  38. Exercise
  • -Appendix 1. Glossary of useful terms10
  • -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)11
  • -Endnotes
About the Author

Venkatesh Govindarajan