ECONOMICS

• CONCEPTS OF LIFE CYCLE COSTING WITH

REFERENCE TO BUILDINGS

• SOURCES OF FINANCE FOR BUILDINGS

LIFE CYCLE COST
THERE ARE NUMEROUS COSTS ASSOCIATED WITH
ACQUIRING, OPERATING, MAINTAINING, AND
DISPOSING OF A BUILDING OR BUILDING SYSTEM.

BUILDING-RELATED COSTS USUALLY FALL INTO THE

FOLLOWING CATEGORIES:

• INITIAL COSTS—PURCHASE, ACQUISITION,

CONSTRUCTION COSTS

• FUEL COSTS

• OPERATION, MAINTENANCE, AND REPAIR COSTS

• REPLACEMENT COSTS

• RESIDUAL VALUES—RESALE OR SALVAGE VALUES OR

DISPOSAL COSTS

• FINANCE CHARGES—LOAN INTEREST PAYMENTS

• NON-MONETARY BENEFITS OR COSTS

 LIFE CYCLE COST
LIFE CYCLE COST ANALYSIS BECAME POPULAR IN THE
1960S WHEN THE CONCEPT WAS TAKEN UP AS AN
INSTRUMENT TO IMPROVE THE COST EFFECTIVENESS OF
BUILDING CONSTRUCTION.

• A LIFE CYCLE COST ANALYSIS CALCULATES THE COST OF

A BUILDING OR CAMPUS OVER ITS ENTIRE LIFE SPAN.

• THIS ALSO INVOLVES THE PROCESS OF PRODUCT LIFE

CYCLE MANAGEMENT SO THAT THE LIFE CYCLE PROFITS
ARE MAXIMISED.

THE ANALYSIS OF A TYPICAL SYSTEM COULD INCLUDE

COSTS FOR:

• PLANNING AND DESIGN

• CONSTRUCTION

• OPERATION,

• MAINTENANCE,

• COST OF REPLACEMENT,

• DISPOSAL OR SALVAGE.
SOURCES OF FINANCE
FOR BUILDINGS

BANKS – LOANS
BANKS – MORTGAGES
STOCKS
OTHER INVESTMENTS
NATIONAL HOUSING BANK
HUDCO