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    Michael Ermann

    Lifecycle cost analysis: Tells us things like which chiller is really cheaper . . . in the LONG term? LCCA means accounting for the cost of not only purchasing and installing a system or material, but also the (inflation-adjusted) cost of running it, powering it, maintaining it, and salvaging it. Sometimes the mechanical system that is least expensive to install is really cheaper over the long term, and sometimes a more-expensive but more-energy-efficient one is less expensive over the lifetime of the equipment, usually set at twenty years, but that varies. Of course we can do a back of envelope guess based on current energy prices and expected savings, but a true lifecycle analysis is far to complex for this thread or for an exam like this. You'd have to know the expected cost of capital (inflation and interest rates and what you could earn if you invested that money in something else instead over that time period), the future cost of energy, the eventual salvage value of the equipment after it's replaced, and you'd have to come up with a "net present value" for the first twenty years of operation . . . that's the easiest way to visualize LCCA but coming to even that number requires a spreadsheet and a firm grasp of money compounding and a large number of assumptions about the future, each of which is really an educated guess. What you're left with in any computer graded exam (that doesn't include a spreadsheet software for the tester to utilize) then is a kind of cartoon version of LCCA . . . a first-approximation approach or a "we give you all the final numbers you'd need for net present value and you pick the lower net present value" approach. . . I think it's best to just understand the concepts I outlined and do your best within that conceptual understanding on test day.

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    Rebekka O'Melia

    Hi Brendan,

    A life cycle cost analysis really isn't a topic for PA.  What are you looking at...?

    Our consultants should be doing life cycle cost analysis for systems.  They may not even have to do a formal life cycle cost analysis to know which system(s) are cheaper over the full life cycle.

    Hope this helps!

    Rebekka O'Melia, R.A., NCARB, B. Arch, M. Ed, NOMA, Step UP ARE 5.0 Courses

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    Brendan Clifford

    The PA exam had some questions related to Life cycle cost analysis and selecting an alternate mechanical system.

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    Amrata Kirpalani

    I have encountered LCC math problems:

    They will generally give you information like initial cost and operating cost over 20 years or something. and sometimes they'll give you the cost of how much money you'll get back if you sell the unit after 20 years. then you have to do a math calculation of Initial cost + operating cost + repair cost - what you get upon the sale....and then compare for 2 or 3 systems! 

    There are a few variations to the types of questions of course. sometimes they'll give you a utility rate and energy use. Sometimes you have to calculate cost /month to calculate operating costs. the formula:

    cost / month = energy use x utility rate 

    cost to operate = no.of years x 12 months per year x cost/month

    I believe Elif's PA bundle of quizzes has some practice questions. 

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