1、Designation: E 917 05An American National StandardStandard Practice forMeasuring Life-Cycle Costs of Buildings and BuildingSystems1This standard is issued under the fixed designation E 917; the number immediately following the designation indicates the year oforiginal adoption or, in the case of rev
2、ision, 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.INTRODUCTIONSeveral methods of economic evaluation are available to measure the economic performance of abuild
3、ing or building system over a specified time period. These methods include, but are not limitedto, life-cycle cost (LCC) analysis, the benefit-to-cost ratio, internal rate of return, net benefits,payback, multiattribute decision analysis, risk analysis, and related measures (see Practices E 964,E 10
4、57, E 1074, E 1121, E 1765, and E 1946). These methods differ in their measure and, to someextent, in their applicability to particular types of problems. Guide E 1185 directs you to theappropriate method for a particular economic problem. One of these methods, life-cycle cost (LCC)analysis, is the
5、subject of this practice. The LCC method sums, in either present-value or annual-valueterms, all relevant costs associated with a building or building system over a specified time period.Alternative (mutually exclusive) designs or systems for a given functional requirement can becompared on the basi
6、s of their LCCs to determine which is the least-cost means of satisfying thatrequirement over a specified study period.1. Scope1.1 This practice establishes a procedure for evaluating thelife-cycle cost (LCC) of a building or building system andcomparing the LCCs of alternative building designs or s
7、ystemsthat satisfy the same functional requirements.1.2 The LCC method measures, in present-value or annual-value terms, the sum of all relevant costs associated withowning and operating a building or building system over aspecified time period.1.3 The basic premise of the LCC method is that to anin
8、vestor or decision maker all costs arising from an investmentdecision are potentially important to that decision, includingfuture as well as present costs.Applied to buildings or buildingsystems, the LCC encompasses all relevant costs over adesignated study period, including the costs of designing,p
9、urchasing/leasing, constructing/installing, operating, main-taining, repairing, replacing, and disposing of a particularbuilding design or system.2. Referenced Documents2.1 ASTM Standards:2E 631 Terminology in Building ConstructionsE 833 Terminology of Building EconomicsE 964 Practice for Measuring
10、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 Building SystemsE 1074 Practice for Measuring Net Benefits and Net Sav-ings for Investments i
11、n Buildings and Building SystemsE 1121 Practice for Measuring Payback for Investments inBuildings and Building SystemsE 1185 Guide for Selecting Economic Methods for Evalu-ating Investments in Buildings and Building SystemsE 1369 Guide for Selecting Techniques for Treating Uncer-tainty and Risk in t
12、he Economic Evaluation of Buildingsand Building Systems1This practice is under the jurisdiction of ASTM Committee E06 on Perfor-mance of Buildings and is the direct responsibility of Subcommittee E06.81 onBuilding Economics.Current edition approved Oct. 1, 2005. Published November 2005. Originallyap
13、proved in 1983. Last previous edition approved in 2002 as E 917 02.2For referenced 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 we
14、bsite.1Copyright ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.E 1765 Practice for Applying the Analytical Hierarchy Pro-cess (AHP) to Multiattribute Decision Analysis of Invest-ments Related to Buildings and Building SystemsE 1946 Practice f
15、or Measuring Cost Risk of Building andBuilding SystemsE 2204 Guide for Summarizing the Economic Impacts ofBuilding-Related Projects2.2 ASTM Adjuncts:Discount Factor Tables, Adjunct to Practice E 91733. Terminology3.1 DefinitionsFor definitions of terms used in the prac-tice, refer to Terminologies E
16、 631 and E 833.4. Summary of Practice4.1 This practice outlines the recommended procedures forcomputing the LCCs associated with a building or buildingsystem over a specified time period. It identifies and givesexamples of objectives, alternatives, and constraints for anLCC analysis; identifies proj
17、ect data and general assumptionsneeded for the analysis; and presents alternative approaches forcomputing LCCs. This practice requires that the LCCs ofalternative building designs or systems be compared over acommon time period to determine which design or system hasthe lowest LCC. This practice als
18、o states that uncertainty,unquantifiable effects, and funding constraints shall be consid-ered in the final analysis. It identifies the recommendedcontents of an LCC report, describes proper applications of theLCC method, provides examples of its use, and identifieslimitations of the method. A compr
19、ehensive example of theLCC method applied to a building economics problem isprovided in Appendix X1.5. Significance and Use5.1 LCC analysis is an economic method for evaluating aproject or project alternatives over a designated study period.The method entails computing the LCC for alternative buildi
20、ngdesigns or system specifications having the same purpose andthen comparing them to determine which has the lowest LCCover the study period.5.2 The LCC method is particularly suitable for determiningwhether the higher initial cost of a building or building systemis economically justified by reducti
21、ons in future costs (forexample, operating, maintenance, repair, or replacement costs)when compared with an alternative that has a lower initial costbut higher future costs. If a building design or system specifi-cation has both a lower initial cost and lower future costsrelative to an alternative,
22、an LCC analysis is not needed toshow that the former is the economically preferable choice.5.3 If an investment project is not essential to the buildingoperation (for example, replacement of existing single-panewindows with new double-pane windows), the project must becompared against the “do nothin
23、g” alternative (that is, keepingthe single pane windows) in order to determine if it is costeffective. Typically the “do nothing” alternative entails noinitial investment cost but has higher future costs than theproposed project.6. Procedure6.1 Follow these steps in calculating the LCC for a buildin
24、gor building system:6.1.1 Identify objectives, alternatives, and constraints (seeSection 7).6.1.2 Establish basic assumptions for the analysis (see 8.1).6.1.3 Compile cost data (see 8.2).6.1.4 Compute the LCC for each alternative (see Section 9).6.1.5 Compare LCCs of each alternative to determine th
25、eone with the minimum LCC (see 10.1).6.1.6 Make final decision, based on LCC results as well asconsideration of risk and uncertainty, unquantifiable effects,and funding constraints (if any) (see 10.2, 10.3, 10.4, and 10.5).7. Objectives, Alternatives, and Constraints7.1 Specify the design or system
26、objective that is to beaccomplished, identify alternative designs or systems thataccomplish that objective, and identify any constraints thatlimit the available options to be considered.7.2 An example is the selection of a space heating systemfor a new house. The system must satisfy the thermal comf
27、ortrequirements of the occupants throughout the heating season.Available alternatives (for example, various gas furnaces, oilfurnaces, heat pumps, and electric baseboard heaters) may havedifferent types of fuel usage with different unit costs, differentfuel conversion efficiencies, different initial
28、 costs and expectedmaintenance and repair costs, and different lives. Systemselection will be constrained to those fuel types available at thebuilding site.8. Data and Assumptions8.1 Basic AssumptionsEstablish the uniform assumptionsto be made in the economic analysis of all alternatives. Theseassum
29、ptions usually include, but are not limited to, theconsistent use of the present-value or annual-value calculationmethod, the base time and study period, the general inflationrate, the discount rate, the marginal income tax rate (whererelevant), the comprehensiveness of the analysis, and theoperatio
30、nal profile of the building or system to be evaluated.8.1.1 Present-Value Versus Annual-Value CalculationsThe LCCs of project alternatives must be calculated uniformlyin present-value or annual-value terms. In the former, all costsare discounted to the base time; in the latter, all costs areconverte
31、d to a uniform annual amount equivalent to the presentvalue when discounted to the base time.8.1.2 Study PeriodThe study period appropriate to theLCC analysis may or may not reflect the life of the building orsystem to be evaluated. The same study period must be used foreach alternative when present
32、-value calculations are used. Anannual-value LCC may, under certain restrictive assumptions,be used to compare alternatives with different study periods(see 9.2.3). The following guidelines may be useful forselecting a study period for an LCC analysis:8.1.2.1 When analyzing a project from an individ
33、ual inves-tors standpoint, the study period should reflect the investors3Available from ASTM International Headquarters. Order Adjunct No.ADJE091703.E917052time horizon. For a homeowner, the study period for ahouse-related investment might be based on the length of timethe homeowner expects to resid
34、e in the house. For a commer-cial property owner, the study period might be based on theanticipated holding period of the building. For an owner/occupant of a commercial building, the study period mightcorrespond to the life of the building or building system beingevaluated. For a speculative invest
35、or, the study period might bebased on a relatively short holding period. For investments bygovernment agencies and large institutions, specific internalpolicies often direct the choice of study period.8.1.2.2 When LCC analyses of alternative building systemsor design practices are performed for gene
36、ral informationrather than for a specific application (for example, governmentor industry research to determine the cost effectiveness ofthermal insulation or high-efficiency heating and coolingequipment in typical installations), the study period will oftencoincide with the service life of the mate
37、rial or system (but belimited to the typical life of the type of building where it is tobe installed). When the service life is very long, a moreconservative choice for the study period might be used if theuncertainty associated with the long-term forecasting of costssubstantially reduces the credib
38、ility of the results.8.1.2.3 Regardless of the type of investor or purpose of theanalysis, use the same study period for all categories of costswhen calculating the present value of any cost associated witha project. Furthermore, when comparing alternative designs orsystems on the basis of their pre
39、sent-value LCCs, use the samestudy period for each investment alternative.8.1.2.4 When the study period selected is significantlyshorter than the service life of the building or system evaluated,it is important that a realistic assessment of the projects resale(or residual) value at the end of the s
40、tudy period be included inthe LCC analysis. Even if the building will not be sold at thattime, the resale value will likely have a significant impact onthe LCC.8.1.3 InflationGeneral price inflation is the reduction inthe purchasing power of the dollar from year to year, asmeasured, for example, by
41、the percent increase in the grossnational product (GNP) deflator over a given year. LCCanalyses can be calculated in constant-dollar terms (net ofgeneral inflation) or in current-dollar terms (including generalinflation). If the latter is used, a consistent projection of generalprice inflation must
42、be used throughout the LCC analysis,including adjustment of the discount rate to incorporate thegeneral inflation rate.8.1.3.1 When income tax effects are not included in theLCC analysis, as in the case of LCC evaluations of nonprofitbuildings and owner-occupied houses (without financing), it isusua
43、lly easier to express all costs in constant dollars. Pricechanges for individual cost categories that are higher or lowerthan the rate of general inflation can be included by usingdifferential rates of price change for those categories.8.1.3.2 When income tax effects are included in the LCCanalysis,
44、 it is usually easier to express all costs in currentdollars because income taxes are tied to current-dollar cashflows rather than constant-dollar cash flows.8.1.4 Discount RateThe discount rate selected shouldreflect the investors time value of money. That is, the discountrate should reflect the ra
45、te of interest that makes the investorindifferent between paying or receiving a dollar now or at somefuture point in time. The discount rate is used to convert costsoccurring at different times to equivalent costs at a commonpoint in time.8.1.4.1 Select a discount rate equal to the rate of return on
46、the next best available use of funds. Where the discount rate islegislated or mandated for a given institution, that rate takesprecedence.8.1.4.2 A discount rate that includes general price inflationover the study period is referred to as the “nominal” discountrate in this practice. A discount rate
47、expressed in terms net ofgeneral price inflation is referred to as the “real” discount rate.8.1.4.3 Anominal discount rate, i, and its corresponding realdiscount rate, r, are related as follows:r 51 1 i1 1 I2 1ori 5 1 1 r!1 1 I! 2 1 (1)where:I = the rate of general price inflation.8.1.4.4 Use a real
48、 discount rate if estimates of future costsare expressed in constant dollars, that is, if they do not includegeneral inflation.8.1.4.5 Use a nominal discount rate if estimates of futurecosts are expressed in current dollars, that is, if they includegeneral inflation.8.1.4.6 When alternative building
49、 or system designs arecompared using the LCC method, use the same discount rate ineach LCC computation.8.1.5 ComprehensivenessDifferent levels of effort can beapplied in undertaking an LCC analysis. The appropriate levelof comprehensiveness depends upon the degree of complexityof the problem, the intended purpose of the evaluation, thelevel of monetary and nonmonetary impacts contingent uponthe investment decision, the cost of the different levels ofcomprehensiveness, and the resources available to the investoror decision maker.8.1.5.1 Some anticipated effects are more di
