Service or maintenance

PV = TV(UPW*)

The present value of such

which involve increasing

where

costs are calculated by

n

[ ]

(1+e)

1

amounts of work

using a modified version

(1+d)

Frequent replacements

UPW*=

of the UPW formula (UPW*)

(1+d)

1

that escalate at a rate

which allows for cost

(1+e)

different than inflation

escalation.

n

1+e

( )[ ( )]

1+e

or UPW*=

1

d-e

1+d

Fuel related costs, such as fuel

PV = TV(UPW*)

Energy related UPW* factors

oil, natural gas or electricity

are found in the NIST

BLCC program.

Relating Budgetary

E = e + I + eI

Needed to convert budgetary

Escalation to Real Growth

or e = E-I

escalation to real growth

Escalation

1+ I

escalation.

FV = future value

PV = present value

TV = today's value

d

= real discount rate

e

= real growth escalation rate (the differential escalation rate that exists

after removing the influence of general inflation)

n

= number of years to occurrence or the analysis period, as appropriate

E

= Budgetary Escalation

I

= Inflation Rate

UPW = Uniform Present Worth factor for fixed recurring costs

UPW* = Modified Uniform Present Worth factor for escalating recurring costs

GENERAL

REQUIREMENTS

Life Cycle Costing

Revised March 2005 PBS-P100

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