CCE Life Cycle Costing & Total Cost of Ownership 1

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 E917 is the standard practice for measuring life-cycle costs of buildings and building systems.

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

LCC encompasses all costs from acquisition through disposal, providing a complete economic picture of owning and operating an asset.

Question 3

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

Accepted Answer

Discount rate

Answer

A discount rate reflects the time value of money, converting future costs to their equivalent present-day value for fair comparison.

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

Salvage value is the expected market or scrap value recoverable from an asset at the end of its service life, which reduces total LCC.

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

For most facilities, cumulative operations and maintenance costs far exceed initial capital costs over a typical 20–40 year service life.

CCE - Certified Cost Engineer Practice Test