CCE Life Cycle Costing & Total Cost of Ownership

Question 1

Which ASTM standard is the primary guide for Life Cycle Cost Analysis (LCCA) of buildings and building systems?

Accepted Answer

ASTM E917

Answer

ASTM E1557

Answer

ASTM E2103

Answer

ASTM E1699

Question 2

Life Cycle Cost (LCC) analysis is BEST defined as:

Accepted Answer

The total cost of acquisition, operation, maintenance, and disposal of an asset over its useful life

Answer

The sum of all capital expenditures for a project

Answer

The net present value of future revenues minus initial investment

Answer

The annual operating budget multiplied by the expected service life

Question 3

When performing LCCA, future costs are converted to present values using a:

Accepted Answer

Discount rate

Answer

Inflation escalation factor

Answer

Productivity index

Answer

Cost performance index

Question 4

In Life Cycle Costing, the term 'salvage value' refers to:

Accepted Answer

The estimated residual value of an asset at the end of its useful life

Answer

The original purchase price of the asset

Answer

The cost to repair a damaged asset

Answer

The insurance payout upon total loss of the asset

Question 5

Which cost category typically constitutes the largest portion of Life Cycle Cost for a complex industrial facility?

Accepted Answer

Operations and maintenance cost over the facility's life

Answer

Initial capital/acquisition cost

Answer

Decommissioning and disposal cost

Answer

Permitting and regulatory compliance cost

Question 6

The Uniform Present Worth (UPW) factor in LCCA is used to convert:

Accepted Answer

A series of equal annual costs to a present value equivalent

Answer

A single future lump sum to present value

Answer

Present costs to future annual equivalents

Answer

Variable costs to a uniform annual series

Question 7

A project has two alternatives: Alternative A with a lower first cost but higher annual maintenance, and Alternative B with a higher first cost but lower annual maintenance. The BEST method to select the economical choice is:

Accepted Answer

Calculate and compare the Life Cycle Cost of both alternatives at a common discount rate

Answer

Select Alternative A because it has the lower initial cost

Answer

Select Alternative B because lower maintenance is always preferred

Answer

Select the alternative with the lower annual maintenance cost