Professional Documents
Culture Documents
Academic Year:2009/2010
INTRODUCTION
This report is intended to evaluate the Whole Life Cost of the HSBC Building at Rajagiriya and analyze the sensitivity of those cost in terms of Discount Rate and Different Lifetime of the Building.
design, development, production, operation, maintenance, support, and final disposition of a major system over its anticipated useful life span
Benefits of WLC
Optimising total cost of ownership/occupation
maintenance and repair Providing data on actual performance Encouraging discussion and recording of decisions about the durability of materials Encouraging analysis of business needs and communication
Drawbacks of WLC
A common drawback of most life cycle
models is that they are static Much expensive Time consuming Accuracy of data is doubtful Obtaining the data for analyzing is a tying task
Cost categories
Initial CostsPurchase, Acquisition,
Construction Costs Fuel Costs Operation, Maintenance, and Repair Costs Replacement Costs Residual ValuesResale or Salvage Values or Disposal Costs Finance ChargesLoan Interest Payments Non-Monetary Benefits or Costs
Cost (Rs)
622,750,000.00 150,870,000.00 6,467,250.00
The discount rate for HSBC Building is determined annually by the Treasury bill rate & Inflation rate ; Discount Rate calculated is 6.1% & present value of future recurring costs is PV = 9.348 Building/component life Treatment of Inflation
Yr 15
Yr 20
Yr 25
Total PV 178,090,694.67
44,567,632.61
75,485,335.87
8,249,126.09
Yr 10
Yr 15
Yr 20
Yr 25
Yr 50
Total PV
1,431,898.78
3,512,092.92
7,572,992.53
892,887.89
223,731.68
13,633,6
03.80
LLC Calculation
Life Cycle Cost = Initial Investment +
Operating Costs + Total Maintenance & Repair Cost + (Replacement Cost Residual Value)
Life Cycle Cost = 622,750,000.00 +
Sensitivity Analysis
Cost Element
Total Initial Cost Total Operating Cost Maintenance & Repair Costs Replacement Costs Total Residual Value Total 99,957,816.00 178,090,694.67 -11,847,828.02 3,220,797,402.65
PV (Rs)
622,750,000.00 2,331,846,720.00
%
19.34% 72.40% 3.10% 5.53% -0.37% 100%
1,000,000,000.00
500,000,000.00 0.00 -500,000,000.00
view, the study recommended that life time of 60 years and discount rate of 6.03% are suitable to the HSBC Building
References
Life-Cycle Cost Analysis (LCCA) By Sieglinde Fuller National Institute of Standards and Technology (NIST) Last updated: 06-28-2010
Thanking You