1、Designation: E 1185 07Standard Guide forSelecting Economic Methods for Evaluating Investments inBuildings and Building Systems1This standard is issued under the fixed designation E 1185; the number immediately following the designation indicates the year oforiginal adoption or, in the case of revisi
2、on, the year of last revision. A number in parentheses indicates the year of last reapproval. Asuperscript epsilon (e) indicates an editorial change since the last revision or reapproval.1. Scope1.1 This guide identifies types of building design andbuilding system decisions that require economic ana
3、lysis andrecommends ASTM practices, adjuncts, and computer pro-grams that may be used to implement the appropriate economicmethods for each decision type.2. Referenced Documents2.1 ASTM Standards:2E 631 Terminology of Building ConstructionsE 833 Terminology of Building EconomicsE 917 Practice for Me
4、asuring Life-Cycle Costs of Buildingsand Building SystemsE 964 Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building SystemsE 1057 Practice for Measuring Internal Rate of Return andAdjusted Internal Rate of Return for Investments in Build-ings and Buildin
5、g SystemsE 1074 Practice for Measuring Net Benefits and Net Sav-ings for Investments in Buildings and Building SystemsE 1121 Practice for Measuring Payback for Investments inBuildings and Building Systems2.2 ASTM Adjuncts:Discount Factor Tables, Adjunct to Practice E 91733. Terminology3.1 Definition
6、sFor definitions of terms used in this guide,refer to Terminologies E 631 and E 833.4. Significance and Use4.1 Standard practices for measuring the economic perfor-mance of investments in buildings and building systems havebeen published by ASTM. A computer program that produceseconomic measures con
7、sistent with these practices is avail-able.4Discount factor tables have been published by ASTM tofacilitate computing measures of performance for most of thepractices.34.2 This guide can be used to: (1) identify types of buildingdesign and system decisions that require economic analysis; (2)match th
8、e technically appropriate economic methods with thedecisions; and (3) locate the methods in the ASTM practicesand adjuncts listed in Section 2.4.3 More than one method can be technically appropriatefor many building decisions. Therefore the choice in practiceof which technically appropriate economic
9、 method to use forevaluating a particular building decision will often depend onthe perspective of the user. Some examples of factors thatinfluence the user are: (1) ease of applying the methods, (2)level of familiarity of the user with the methods, (3) preferenceof the user for different methods, a
10、nd (4) presence of budgetlimitations for the projects.4.4 This guide identifies some features and limitations of themethods that might influence users choices under varyingconditions.5. How to Use This Guide5.1 Table 1 indicates which standard practices (that is,economic methods) are technically app
11、ropriate for the follow-ing four types of building investment decisions: acceptance/rejection, design, size, and priority.5.1.1 In the context of this guide, an acceptance/rejectiondecision pertains to the cost effectiveness of an individualbuilding or building system. This type of decision is madei
12、ndependently of other project evaluations. It focuses on themerits of a single choice rather than on determining the mostcost-effective design or size.5.1.2 A design decision pertains to choices among compet-ing designs for an individual building or building system,where only one design can be chose
13、n.1This guide is under the jurisdiction of ASTM Committee E06 on Performanceof Buildings and is the direct responsibility of Subcommittee E06.81 on BuildingEconomics.Current edition approved April 1, 2007. Published April 2007. Originallyapproved in 1987. Last previous edition E 1185 02.2For referen
14、ced ASTM standards, visit the ASTM website, www.astm.org, orcontact ASTM Customer Service at serviceastm.org. For Annual Book of ASTMStandards volume information, refer to the standards Document Summary page onthe ASTM website.3Available from ASTM International Headquarters. Order Adjunct No.ADJE091
15、703.4BLCC5, the “NIST Building Life-Cycle Cost Program,” Office of AppliedEconomics, Building and Fire Research Laboratory, National Institute of Standardsand Technology. Available at http:/www.eren.doe.gov/femp. Click on “TechnicalAssistance” first, then on “Life-Cycle Cost Analysis.”1Copyright AST
16、M International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.5.1.3 A sizing decision pertains to choices among compet-ing sizes or investment levels for an individual building orbuilding system, where only one size or level can be chosen.5.1.4 A ranking decisi
17、on entails choosing one or moreprojects from a group of cost-effective projects when theavailable budget is not sufficient to fund them all.5.1.5 Examine Table 1 to find which methods should beconsidered for a given decision. The ASTM designations aregiven in parentheses under the method names.5.2 I
18、f there is any doubt as to which type of buildingdecision shown in Table 1 best applies, consult the examples inTable 2. Table 2 lists examples for each of the four types ofdecisions shown in Table 1. Find in Table 2 a building decisionsimilar to the one being analyzed, and select the correspondingd
19、ecision type from Table 1. Section 6 contains illustrative casesof this process.5.3 Once the type of decision has been identified and Table1 has been consulted for the technically appropriate method,there will be several methods from which to choose. Note thatwhile all of the methods that are marked
20、 as appropriate for agiven decision will generally give answers that support thesame decision (with the exception of payback), there are likelyto be special considerations that make one or more methodspreferred over the others. Examine the special considerationslisted in Table 3 before making a fina
21、l choice of methods.5.4 Examine the practice(s) that corresponds to the chosenmethod(s). In the selected practice(s), read the sections onsignificance and use, applications, and limitations. If thepractice(s) still seems appropriate, follow its procedures. If not,repeat the process using Tables 1 th
22、rough 3 until an acceptablepractice has been found or it has been determined that none ofthe practices is suitable for the decision at hand.5.5 For assistance in calculating the measure(s) of economicperformance provided by the selected method(s), use theadjunct and BLCC54. The adjunct on Discount F
23、actor Tablessupports manual calculations for all of the methods. TheBuilding Life-Cycle Cost Computer Program (BLCC5) sup-ports computer calculations for all the methods except netbenefits where revenues are involved, and payback.6. Illustrative Cases6.1 Section 6 illustrates how to use this guide t
24、o choose theappropriate practice for each of the four types of buildinginvestment decisions listed in Table 2.6.2 Acceptance or Rejection Decisions:6.2.1 If it is known (by recognition of the type of decisionor by having examined examples in Table 2) that the buildingdecision to be made is one of ac
25、cepting or rejecting anindividual project, then a choice must be made from the fivepractices listed in Table 1. To illustrate how such a choicemight be made, an accept/reject building decision is evaluatedin terms of the special considerations in Table 3.6.2.2 An example of an accept/reject building
26、 decision iswhether to install a programmable time clock to controlheating, ventilating, and air conditioning (HVAC) equipment ina commercial building. The time clock would reduce electricityconsumption by turning on only that part of the HVACequipment that is needed during hours when the building i
27、s notoccupied. Each of the five practices indicated in Table 1 for thisTABLE 1 Standard Practices For Making Building DecisionsAType ofBuildingDecisionApplicable StandardsLCC(E 917)BCR(SIR)(E 964)IRR(AIRR)(E 1057)NB(NS)(E 1074)PB(E 1121)Acceptanceor rejectionBBBBCDesignBDDBESizePriority orrankingEBB
28、EEAAll of the practices require discounting operations, but only Practice E 917explains discounting in detail. All of the methods can be applied using techniquesfor treating uncertainty and risk. Practice E 917 discusses briefly some of thesetechniques. The other practices do not discuss them.BTechn
29、ically appropriate standard practice when total discounted benefits(savings) and costs are considered.CNote limitations in Table 3.DTechnically appropriate standard practice when incremental discounted ben-efits (savings) and costs are considered.ENot recommended.TABLE 2 Examples of Building Investm
30、ent DecisionsType of Building Decision ExamplesAcceptance or rejection A.1 Is a water heater insulation kit cost effective?A.2 Are fire sprinklers cost effective?A.3 Is a given control system cost effective for managing HVAC equipment?A.4 Is a solar hot water system cost effective?Design D.1 Is sing
31、le, double, or triple glazing most cost effective?D.2 What heating system is most cost effective?D.3 Which orientation of a building is most cost effective?D.4 Which code-approved plumbing system is most cost effective?D.5 Which wall type (for example, masonry, wood frame, curtain wall) is most cost
32、 effective?D.6 What floor finish (for example, carpeting, tile, wood) is most cost effective?D.7 What kind of insulation (for example, cellulose, fiberglass, rigid foam) is most cost effective?D.8 Is an item with low first costs more cost effective than a more durable substitute with higher first co
33、sts?Size S.1 What is the economically efficient level (Rvalue) of insulation in the walls and above the ceiling of a house?S.2 How many square feet of collector area should be installed in a solar energy system?S.3 What heat pump efficiency (for example, HSPF 1.75, 2.0, 2.25) is most cost effective?
34、S.4 What furnace efficiency (for example, AFUE 60 %, 75 %, 90 %) is most cost effective?S.5 What air conditioner efficiency (for example, SEER 7.0, 9.0, 11.0) is most cost effective?Priority or ranking P.1 What combination of investments in a given building (for example, new water heater, new floor
35、tile,and new lighting system) is economically preferred when each is justifiable on economicgrounds, but insufficient funds are available to pay for all of them?E1185072type of decision is examined to see how useful it would be inassessing the cost effectiveness of the time clock.6.2.3 The first met
36、hod indicated in Table 1 is life-cycle cost(LCC). Life-cycle costs are the sum over a given study periodof the costs of initial investment (less resale value), replace-ments, operations (including energy use), and maintenance andrepair of an investment decision (expressed in present orannual value t
37、erms). Table 3 shows that the LCC methodprovides a dollar measure. Thus if decision makers want adollar measure of cost effectiveness, LCC would meet thatcriterion. Table 3 also shows that the LCC method is mostuseful where cash flows are primarily costs. If the principalitems affected by the time c
38、lock are increased capital costs forthe time clock and reduced energy costs, then the LCC methodwould be appropriate.6.2.3.1 To determine if the time clock is cost effective inaccordance with the LCC method, the LCC of providingheating and cooling without the time clock would be comparedagainst the
39、LCC of heating and cooling with the time clock,where the costs of the time clock and its associated energycosts are included. On economic grounds, the time clock wouldbe acceptable if its LCC were less than the LCC without it.6.2.3.2 Note that the LCCs for each alternative (as discussedin limitation
40、s in Table 3) must be computed to make the LCCcomparison. Note further that the two alternatives must becompared for the same period of time for the LCC comparisonto be valid.6.2.4 The second method indicated in Table 1 is the benefit-to-cost ratio (BCR) or savings-to-investment ratio (SIR). Table3
41、shows this to be a dimensionless ratio of project benefits orsavings to project costs. Benefits (savings) and costs areneeded to calculate this ratio. In evaluating the time clockinvestment, the problem must be structured so that the energycost reductions from having the time clock are expressed asb
42、enefits or savings and are compared against the associatedincreased capital cost. If the savings from the time clockexceed its associated costs (for example, if the SIR 1.0), thenthe time clock is cost effective.6.2.5 The third method in Table 1 is the internal rate ofreturn (IRR). This is the only
43、method in Table 3 that providesa rate-of-return measure in percentage terms. To use the IRR toevaluate the time clock investment, savings and cost data areneeded. The IRR is that rate of interest that discounts the futurestream of cash flows (net savings in this case) to a sum that justequals the in
44、vestment cost of the time clock. If the IRR isgreater than the minimum acceptable rate of return to theinvestor (MARR), then the time clock is cost effective.NOTE 1The Internal Rate of Return of Practice E 1057 defines twoIRR measures: the unadjusted IRR (UIRR) and the adjusted IRR (AIRR).The UIRR m
45、easure assumes that the net cash flows are reinvested at a rateequal to that earned on the original investment, whereas the AIRRmeasure assumes that the net cash flows are reinvested at a rate differentfrom that earned on the original investment. The AIRR measure willsupport the same answer to a giv
46、en building decision as the other methodslisted in Table 1 for that type of building decision. The UIRR measure willnot always support the same answer. In addition, the UIRR methodsometimes yields multiple solutions and therefore gives no clear answer asto whether the time clock is cost effective.6.
47、2.6 The fourth method in Table 1 is net benefits (NB). Ifthe benefits (savings) from the time clock exceed its cost, thenNB 0, and the time clock is cost effective.6.2.7 The fifth method shown in Table 1 is payback (PB). Itcalculates the time to recover investment costs using benefits(savings) and c
48、ost data. PB for the time clock is the number ofyears required for savings from reduced energy costs to justequal the investment costs of the time clock. If PB (forexample, 3 years) is equal to or less than the maximumacceptable payback period (for example, 6 years), the timeclock will satisfy the p
49、ayback criterion for acceptability.However, the limitations section of Table 3 indicates that PB isa misleading measure of cost effectiveness because it ignorescash flows beyond the payback year and, in the case of simplepayback, it ignores the time value of money. Thus it is not areliable measure of cost effectiveness when making accept/reject decisions.TABLE 3 Special ConsiderationsMethodUnit Measure of CostEffectivenessNature of Cash Flows LimitationsLCC $ primarily costs A single LCC measure gives no indication of economic merit of a building orbuilding component. LCC value fo
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