Construction Methods And Project Management2D
Value Engineering - Theory & Concepts - Construction Methods And Project Management Life Cycle Cost Tradeoff Trainer
A systematic and organized approach to providing the necessary functions in a project at the lowest cost.
Open the complete lessonLife-Cycle Cost Alternative Tradeoff
Compare the Present Value Life-Cycle Cost (PV LCC) of two alternatives. Often, an option with a higher initial capital cost provides better long-term value due to lower annual operating and maintenance expenses.
Option A (Lower Initial Cost)
$250,000
$40,000
Option B (Higher Initial Cost)
$320,000
$25,000
Global Parameters
15
6%
Option A Total PV LCC
$638,490
Option B Total PV LCC
$562,806
Recommendation
Option B is more cost-effective
Net Present Value Savings: $75,684