Life Cycle Cost Calculator
The Life Cycle Cost Calculator (LCC) calculator is a financial tool used to assess the total cost of owning and operating an HVAC system over its entire lifespan. It considers not only the initial purchase and installation cost but also ongoing expenses such as annual energy costs and annual maintenance costs. Future costs are discounted to their present value using a specified discount rate to account for the time value of money. An optional salvage value at the end of the system's life can also be included. LCC analysis helps in comparing different system options on a more comprehensive financial basis.
Understanding Key LCC Components: Life Cycle Cost (LCC) encompasses all costs associated with an asset over its life. Major components include Initial Costs (purchase, installation), Operating Costs (energy), Maintenance & Repair Costs, Replacement Costs (of major parts during lifespan, though not in simple LCC), Disposal Costs, and any Salvage Value (which reduces total cost). Using a discount rate to find the Present Value (PV) of future costs is crucial for fair comparisons.
This LCC calculation is simplified. It assumes constant annual costs (energy, maintenance) and does not escalate them for inflation. More detailed LCC analysis may include varying annual costs, major replacement costs during lifespan, disposal costs, and non-monetary factors. This tool is for comparative estimation.