A full lifecycle cost analysis of the nothing’ option will be included as the base case. This will provide the baseline ‘do cost position, and will identify which options include significant changes in costs and will assist in identifying the required funding strategy. The financial evaluation of each option would be conducted using the costing template’. The section ‘Lifecycle includes instructions on how to use the template and provides guidance on the costs to include in the analysis over the expected life of the project. The reason for the chosen term (such as five years, seven years or 10 years) and any other key assumptions would be documented. A summary table of the lifecycle cost analysis should be included in this section as follows. Base case (‘do nothing’ Evaluation criteria option) Option 1 Option 2 Option 3 Revenues ($300,000) ($330,000) ($320,000) ($300,000) Residual ($5,000) ($10,000) ($8,000) $0 Total revenue ($305,000) ($340,000) ($328,000) ($300,000) Acquisition costs $0 $250,000 $200,000 $0 Leasing costs $0 $0 $0 $270,000 Maintenance $300,000 $100,000 $100,000 $75,000 Repair costs $65,000 $50,000 $50,000 $45,000 Operating $75,000 $35,000 $40,000 $65,000 Disposal costs $10,000 $7,500 $7,500 $2,500 costs $450,000 $442,500 $397,500 $457,500 Total net lifecycle costs (net $145,000 $102,500 $69,500 $157,500 present cost) 0 +2 +4 –4 Note: example table only The table above shows hypothetical amounts for illustrative purposes only. The financial analysis would be scored using the following rating system. Ratings Value Least expensive compared with the base case +4 Significantly less expensive than the base case +3
A full lifecycle cost analysis of the ‘do nothing’ option will be included as the base case. This will provide the baseline cost position, and will identify which options include significant changes in costs and will assist in identifying the required funding strategy. The financial evaluation of each option would be conducted using the ‘Lifecycle costing template’. The section includes instructions on how to use the template and provides guidance on the costs to include in the analysis over the expected life of the project. The reason for the chosen term (such as five years, seven years or 10 years) and any other key assumptions would be documented. A summary table of the lifecycle cost analysis should be included in this section as follows. Evaluation criteria Base case (‘do nothing’ option) Option 1 Option 2 Option 3 Revenues Residual Total revenue ($300,000) ($5,000) ($305,000) ($330,000) ($10,000) ($340,000) ($320,000) ($8,000) ($328,000) ($300,000) $0 ($300,000) Acquisition costs Leasing costs Maintenance Repair costs Operating Disposal costs costs $0 $0 $300,000 $65,000 $75,000 $10,000 $450,000 $250,000 $0 $100,000 $50,000 $35,000 $7,500 $442,500 $200,000 $0 $100,000 $50,000 $40,000 $7,500 $397,500 $0 $270,000 $75,000 $45,000 $65,000 $2,500 $457,500 Total net lifecycle costs (net present cost) $145,000 0 $102,500 +2 $69,500 +4 $157,500 –4 Note: example table only The table above shows hypothetical amounts for illustrative purposes only. The financial analysis would be scored using the following rating system. Ratings Value Least expensive compared with the base case +4 Significantly less expensive than the base case +3