Post on 13-Feb-2018
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Life Cycle Cost Spreadsheet
This sheet is prepared for simple engineering calculations as an aid for making engineering decisions.
Check with your local accountant for specific details before making f inancial decisions of great importance.Paul Barringer, P.E.
Ph: 2!"#2"$!%
&'(: 2!"#2")*+
Email: hpaul-barringer!.com
ebsite: http://www.barringer!.com
0ersion !., 1eptember, 2%%$, Copyright 2%%+ by Barringer & Associates, Inc., umble, T( **)+*, 31'
&or information contact Paul Barringer, P.E., Barringer & Associates, Inc. http://www.barringer!.com hpaul-barring
LCC Worksheet is a simple net present 4alue calculation sheet for your use.
LCC Example is a short problem using E5cel 1ol4er 6Tools/1ol4er7 to find the ma5imum allowed
LCC Example ! is a typical worksheet e5ample for a single alternati4e.
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capital e5penditure.
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Life Cycle Cost Worksheet "##$ello% Boxes Are or 'ata
Discount Rate (%)--> !) Project Life (35 yrs max)--> !* Tax
+* "##et -resent al(e "##Internal /a
Capital Costs: * ! 1
Capital 'c8uisition Costs
Acquisition Costs:
Program 9anagement Costs
Engineering esign Costs
Engineering ata Costs
1pare Parts ; <ogistics Costs
&acilities ; Construction Costs
=nitial Training Costs
Technical ata Costs
ocumentation Costs
'nnual recuring costs
>ther periodic costs
isposal CostsSavings:
'nnual 1a4ings 6use positi4e ?s7
NPV & IRR Calculations: * ! 1
Capital e8uipment @%
Costs +* +* +* +*
1a4ings +* +* +*
1traight <ine epreciation @% @% @%
Profit Before Ta5es @% @% @% @%
Ta5 Pro4ision - )A >f Profit Before Ta5 @% @% @% @%
et =ncome can be profit or loss @% @% @% @% 'dd Back epreciation @% @% @%
Cash &low 6et =ncome epreciation7 @% @% @% @%
iscount &actors - !2A !.%%%% %.2 %.**2 %.*!!
Present 0alue @% @% @% @%
et Present 0alue +*
=nternal Date Deturn ""De8uires at least one positi4e and one negati4e number in t
Fear""G * ! 1
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Inp(t
rovision (%)--> 12)
e 0f /et(rn
3 4 5 6 2 7 *
3 4 5 6 2 7 *
+* +* +* +* +* +* +*
+* +* +* +* +* +* +*
@% @% @% @% @% @% @%
@% @% @% @% @% @% @%
@% @% @% @% @% @% @%
@% @% @% @% @% @% @%@% @% @% @% @% @% @%
@% @% @% @% @% @% @%
%.$)## %.#$*+ %.#%$$ %.+#2) %.+%) %.)$%$ %.)22%
@% @% @% @% @% @% @%
he present 4alue row )2
3 4 5 6 2 7 *
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! 1 3 4 5 6
! 1 3 4 5 6
+* +* +* +* +* +* +*
+* +* +* +* +* +* +*
@% @% @% @% @% @% @%
@% @% @% @% @% @% @%
@% @% @% @% @% @% @%
@% @% @% @% @% @% @%@% @% @% @% @% @% @%
@% @% @% @% @% @% @%
%.2*# %.2#$* %.222 %.2%+$ %.!2* %.!$)! %.!+#$
@% @% @% @% @% @% @%
! 1 3 4 5 6
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2 7 !*
2 7 !*
+* +* +*
+* +* +*
@% @% @%
@% @% @%
@% @% @%
@% @% @%@% @% @%
@% @% @%
%.!)%% %.!!$! %.!%)*
@% @% @%
2 7 !* ! !! !1 !3
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
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!4 !5 !6 !2 !7 1* 1
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
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@%
1! 11 13 14
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
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Life Cycle Cost Worksheet "##$ello% Boxes Are or 'ata
Discount Rate (%)--> !) Project Life (35 yrs max)--> !* Tax
#+!4,354 "##et -resent al(e "##Internal /a
Capital Costs: * ! 1
Capital 'c8uisition Costs @*#,%%%
Acquisition Costs:
Program 9anagement Costs
Engineering esign Costs
Engineering ata Costs
1pare Parts ; <ogistics Costs
&acilities ; Construction Costs
=nitial Training Costs
Technical ata Costs
ocumentation Costs
'nnual recuring costs @!2,2$+ @!2,2$+ @!2,2$+
>ther periodic costs
isposal CostsSavings:
'nnual 1a4ings 6use positi4e ?s7
NPV & IRR Calculations: * ! 1
Capital e8uipment @*#,%%%
Costs +* +!,!53 +!,!53 +!,!53
1a4ings +* +* +*
1traight <ine epreciation @),*#% @),*#% @),*#%
Profit Before Ta5es @% "@!$,%!+ "@!$,%!+ "@!$,%!+
Ta5 Pro4ision - )A >f Profit Before Ta5 @% @$,%# @$,%# @$,%#
et =ncome can be profit or loss @% "@,2 "@,2 "@,2 'dd Back epreciation @),*#% @),*#% @),*#%
Cash &low 6et =ncome epreciation7 "@*#,%%% "@$,!* "@$,!* "@$,!*
iscount &actors - !2A !.%%%% %.2 %.**2 %.*!!
Present 0alue "@*#,%%% "@#,#!* "@+,2$ "@+,)
et Present 0alue #+!4,354
=nternal Date Deturn ""De8uires at least one positi4e and one negati4e number in t
Fear""G * ! 1
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Inp(t
rovision (%)--> 12)
e 0f /et(rn
3 4 5 6 2 7 *
@!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+
@2%,%%%
3 4 5 6 2 7 *
+!,!53 +!,!53 +!,!53 +!,!53 +!,!53 +!,!53 +1!,!53
+* +* +* +* +* +* +*
@),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#%
"@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@)$,%!+
@$,%# @$,%# @$,%# @$,%# @$,%# @$,%# @!),$#
"@,2 "@,2 "@,2 "@,2 "@,2 "@,2 "@22,)2@),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#%
"@$,!* "@$,!* "@$,!* "@$,!* "@$,!* "@$,!* "@!,#*
%.$)## %.#$*+ %.#%$$ %.+#2) %.+%) %.)$%$ %.)22%
"@),2* "@),#%$ "@),!)% "@2,*# "@2,+# "@2,22 "@#,2
he present 4alue row )2
3 4 5 6 2 7 *
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! 1 3 4 5 6
@!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+
! 1 3 4 5 6
+!,!53 +!,!53 +!,!53 +!,!53 +!,!53 +!,!53 +!,!53
+* +* +* +* +* +* +*
@),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#%
"@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+
@$,%# @$,%# @$,%# @$,%# @$,%# @$,%# @$,%#
"@,2 "@,2 "@,2 "@,2 "@,2 "@,2 "@,2@),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#%
"@$,!* "@$,!* "@$,!* "@$,!* "@$,!* "@$,!* "@$,!*
%.2*# %.2#$* %.222 %.2%+$ %.!2* %.!$)! %.!+#$
"@!,**$ "@!,#$ "@!,+!$ "@!,2$+ "@!,!2 "@!,%% "@%%
! 1 3 4 5 6
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2 7 !*
@!2,2$+ @!2,2$+ @!2,2$+
@#,%%%
2 7 !*
+!,!53 +!,!53 +6,!53
+* +* +*
@),*#% @),*#% @),*#%
"@!$,%!+ "@!$,%!+ "@2!,%!+
@$,%# @$,%# @*,#
"@,2 "@,2 "@!),%2@),*#% @),*#% @),*#%
"@$,!* "@$,!* "@,2*
%.!)%% %.!!$! %.!%)*
"@%) "@*!* "@$2
2 7 !* ! !! !1 !3
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
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!4 !5 !6 !2 !7 1* 1
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
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@*#,%%%
1! 11 13 14
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
Exceeds-ro8ect Life
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Life Cycle Cost Worksheet "##$ello% Boxes Are or 'ata Inp(t
Discount Rate (%)--> !) Project Life (35 yrs max)--> !* Tax Provision (%)-->
+1,*7,543 "##et -resent al(e !4.**) "##Internal /ate 0f /et(r
Capital Costs: * ! 1 3
Capital 'c8uisition Costs @),+*,)$*
Acquisition Costs: Program 9anagement Costs
Engineering esign Costs
Engineering ata Costs
1pare Parts ; <ogistics Costs
&acilities ; Construction Costs
=nitial Training Costs
Technical ata Costs
ocumentation Costs
'nnual recuring costs
>ther periodic costs
isposal Costs
Savings:
'nnual 1a4ings 6use positi4e ?s7 +,17,4** +,17,4** +,17,4** +,17,4**
NPV & IRR Calculations: * ! 1 3
Capital e8uipment @),+*,)$*
Costs +* +* +* +* +*
1a4ings +,17,4** +,17,4** +,17,4** +,17,4**
1traight <ine epreciation @!*+,$ @!*+,$ @!*+,$ @!*+,$
Profit Before Ta5es @% @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2
Ta5 Pro4ision - )A >f Profit Before T @% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$%
et =ncome can be profit or loss @% @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2
'dd Back epreciation @!*+,$ @!*+,$ @!*+,$ @!*+,$Cash &low 6et =ncome epreciation7 "@),+*,)$* @+,#+% @+,#+% @+,#+% @+,#+%
iscount &actors - !2A !.%%%% %.2 %.**2 %.*!! %.$)##
Present 0alue "@),+*,)$* @*,*$ @*%#,!#% @$2,# @#$2,!+!
et Present 0alue +1,*7,543
=nternal Date Deturn !4.**) ""De8uires at least one positi4e and one negati4e number in the pre
9(estion: ow much capit;i<en a 2% year proHect life,=int: > =nput annual sa4ings of!> Put + in cell '4 for initi
1et the iterati4e processchange calculations to
1> Click on cell 1 for =DD
E5cel needs to work on3> Click on ?ools, click onset cell: C13 ""remeto 4alue: !4) ""youby changing cell: '4.Click 0 and Koal 1
By con4ention, the =DD is b
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12)
4 5 6 2 7 * !
+,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4**
4 5 6 2 7 * !
+* +* +* +* +* +* +* +*
+,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4**
@!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$
@!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2
"@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$%
@*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2
@!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$@+,#+% @+,#+% @+,#+% @+,#+% @+,#+% @+,#+% @+,#+% @+,#+%
%.#$*+ %.#%$$ %.+#2) %.+%) %.)$%$ %.)22% %.2*# %.2#$*
@#%!,!2 @++,!)# @+%%,!2! @)#*,2#! @)!,*+ @2+,* @2#+,2+ @22*,%)
ent 4alue row )2
l can we afford to spend on a proHect if we sa4e @!,)!,#%%/yearI !2A discount rate, )A ta5 rate, and the internal re8uirment for a !4) internal rate of ret(rnI
!,)!,#%% in the yellow bo5es of row ! for each of the 2% years.liJing the calculations using Excel ;oal Seek ?ool to find how much capital we can afford.for Koal 1eek to perform more accurately by clicking on ?ools, 0ptions, Calc(lation, and(tomatic, place check mark in Iterations, change @ax Iterations L !%%%: @ax Change L %.%%%!nd notice that it refers to the formula in cell C13""this is an important clue because
a formula where as cell 1 only reports the results.oal Seek,mber this is where the formula is locatedan also use %.2#""we start with @! to begin the iterati4e calculationsek will adHust cell '4 L +1,376,156 to meet the =DD L 2#A with P0 L +1,*7,543. sed on cash flow 6row )%7 rather than the present 4alues 6row )27.
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1 3 4 5 6 2 7 !*
+,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4**
1 3 4 5 6 2 7 !*
+* +* +* +* +* +* +* +*
+,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4** +,17,4**
@!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$
@!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2 @!,!++,$)2
"@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$% "@+)+,$%
@*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2 @*%,$*2
@!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$ @!*+,$@+,#+% @+,#+% @+,#+% @+,#+% @+,#+% @+,#+% @+,#+% @+,#+%
%.222 %.2%+$ %.!2* %.!$)! %.!+#$ %.!)%% %.!!$! %.!%)*
@2%2,*!+ @!%,+ @!$!,$%2 @!++,2 @!2,2 @!!#,%2# @!%2,*%! @!,$*
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Life Cycle Cost Worksheet "##$ello% Boxes Are or 'ata Inp(t
Discount Rate (%)--> !) Project Life (yrs)--> !* Tax Provision (%)--> 12)
#+!4,354 "##et -resent al( "##Internal /ate 0f /et(rn
Capital Costs: * ! 1 3 4 5
Capital 'c8uisition Costs @*#,%%%
Acquisition Costs: Program 9anagement Costs
Engineering esign Costs
Engineering ata Costs
1pare Parts ; <ogistics Costs
&acilities ; Construction Costs
=nitial Training Costs
Technical ata Costs
ocumentation Costs
'nnual recuring costs @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+
>ther periodic costs
isposal Costs
Savings:
'nnual 1a4ings 6use positi4e ?s7
NPV & IRR Calculations: * ! 1 3 4 5
Capital e8uipment @*#,%%%
Costs +* +!,!53 +!,!53 +!,!53 +!,!53 +!,!53 +!,!53
1a4ings +* +* +* +* +* +*
1traight <ine epreciation @),*#% @),*#% @),*#% @),*#% @),*#% @),*#%
Profit Before Ta5es @% "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+
Ta5 Pro4ision - )A >f Profit Be @% @$,%# @$,%# @$,%# @$,%# @$,%# @$,%#
et =ncome can be profit or loss @% "@,2 "@,2 "@,2 "@,2 "@,2 "@,2
'dd Back epreciation @),*#% @),*#% @),*#% @),*#% @),*#% @),*#%Cash &low 6et =ncome epreci "@*#,%%% "@$,!* "@$,!* "@$,!* "@$,!* "@$,!* "@$,!*
iscount &actors - !2A !.%%%% %.2 %.**2 %.*!! %.$)## %.#$*+ %.#%$$
Present 0alue "@*#,%%% "@#,#!* "@+,2$ "@+,) "@),2* "@),#%$ "@),!)%
et Present 0alue #+!4,354
=nternal Date Deturn ""De8uires at least one positi4e and one negati4e number in the present 4
;i<en a 2% year proHect life, !2A discount rate, and )A ta5 r
E8uipment cost @*#,%%%. 'nnual sustaining cost L @!2,2$+/yr.isposal costs L @#,%%% in year 2%.
What is the net present <al(e of the pro8ect -D+!4,3 alternati4es to find the most fa4orable P0 6this often means sDemember when you ha4e two negati4e P0Ms from two alternand you will then ha4e a positi4e P0 NdeltaN between the alte
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6 2 7 * ! 1 3 4 5
@!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+
@2%,%%%
6 2 7 * ! 1 3 4 5
+!,!53 +!,!53 +!,!53 +1!,!53 +!,!53 +!,!53 +!,!53 +!,!53 +!,!53 +!,!53
+* +* +* +* +* +* +* +* +* +*
@),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#%
"@!$,%!+ "@!$,%!+ "@!$,%!+ "@)$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+ "@!$,%!+
@$,%# @$,%# @$,%# @!),$# @$,%# @$,%# @$,%# @$,%# @$,%# @$,%#
"@,2 "@,2 "@,2 "@22,)2 "@,2 "@,2 "@,2 "@,2 "@,2 "@,2
@),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#% @),*#%"@$,!* "@$,!* "@$,!* "@!,#* "@$,!* "@$,!* "@$,!* "@$,!* "@$,!* "@$,!*
%.+#2) %.+%) %.)$%$ %.)22% %.2*# %.2#$* %.222 %.2%+$ %.!2* %.!$)!
"@2,*# "@2,+# "@2,22 "@#,2 "@!,**$ "@!,#$ "@!,+!$ "@!,2$+ "@!,!2 "@!,%%
lue row )2
te.
>4erhaul cost L @2%,%%% in year !%.
54> and must be compared to otherelection of the LEAS? negati4e P07.ati4es, you would select the least negati4e,nati4es.
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6 2 7 !*
@!2,2$+ @!2,2$+ @!2,2$+ @!2,2$+
@#,%%%
6 2 7 !*
+!,!53 +!,!53 +!,!53 +6,!53
+* +* +* +*
@),*#% @),*#% @),*#% @),*#%
"@!$,%!+ "@!$,%!+ "@!$,%!+ "@2!,%!+
@$,%# @$,%# @$,%# @*,#
"@,2 "@,2 "@,2 "@!),%2
@),*#% @),*#% @),*#% @),*#%"@$,!* "@$,!* "@$,!* "@,2*
%.!+#$ %.!)%% %.!!$! %.!%)*
"@%% "@%) "@*!* "@$2
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