Showing posts from November, 2015

Life Cycle Costing-2: A Practical Project Feasibility Example

In an earlier simpler example  ,we have worked out the PV (Present Value) of two  possible cash flows for decision making. The example presented in this blog further works out two scenarios side by side and calculates the Payback period of an expenditure as well. As usual, one need to consult Subject Matter Experts and get the advise on the inputs. Problem Statement Decision is required whether to replace Sodium Vapour  Lights with LED Lights. Cash Flows are created on the basis of expert inputs which may be provided or obtained from Facility Management, Procurement and  Electrical Engineering Departments. Risk Management part may also be deliberated  with Accounts, Finance and Legal Departments and can also be reflected into the cash flow. The Excel workbook has been set in  a user friendly setup and may be understood by even a casual Excel User. Download the work book   The following risk factors (not covered in the simulation) are also worth considerations/ eval

Decision Making Through Life Cycle Costing- A Simple Practical Example

Decision Making Through  Life Cycle Costing- A Simple Practical Example Problem Statement: To compare the life cycle costing by calculating the single Present  Value for different scenarios. A choice is required to be made for air conditioning by Installing AC only Installing AC along with insulation works and solar film . The variables would be the Initial costs and the Cost of Capital. The link below would take you to the Excel worksheet wherein the comments in each cell would make you understand the process fully. It is assumed that the user is a knowledge worker and the input parameters have been evaluated through experts. Excel Workbook has been set in a manner that is fit for a novice excel user. Download The Excel File Related Article - THE ECONOMY OF ENERGY EFFICIENT BUILDINGS; AN INDIAN PERSPECTIVE