Sensitivity analysis A sensitivity analysis has been conducted on the net present values by varying the parameters around the major assumptions. The aggregate construction costs imposed by the amendments to the NCC and associated benefits can vary if the assumptions used to quantify these costs/benefits change. These include: Installation costs: Fire hose reel installation costs may vary particularly between States and Territories, where labour rates vary. Therefore a variation of ± 10% will be assessed. Number of new buildings: Datasets to obtain a national figure of new Class 2 and Class 3 buildings and Class 4 parts is not available. Victorian data has been used and extrapolated to estimate the number of new buildings. This number may vary. Discount rate: A discount rate of 3% and 11% will also be assessed. Number of fire extinguishers required: Option 1 requires fire extinguishers to be installed in accordance with AS2444. Depending on the design of the building, the number of extinguishers may vary. Therefore a variation of 1 and 3 extinguishers required will be assessed. Table 5- Net Present Value Sensitivity Analysis Net Present Value Parameter Hose reels Fire extinguishers Cost saving of Option 1 Discount rate $336,878,789 $56,322,473 +$280,556,316 Low (3%) $250,644,817 $41,905,090 +$208,739,727 High (11%) Installation cost $259,335,518 $43,357,557 +$215,977,961 Low (-10%) $316,965,633 $52,992,569 +$263,973,064 High (+10%) Number of new buildings $259,336,424 $43,358,080 +215,978,344 Low (-10%) $316,964,727 $52,993,209 +263,971,518 High (+10%) Number of fire extinguishers required in lieu of a fire hose reels $288,150,576 $24,087,822 +$264,062,754 Low (1)
Sensitivity analysis A sensitivity analysis has been conducted on the net present values by varying the parameters around the major assumptions. The aggregate construction costs imposed by the amendments to the NCC and associated benefits can vary if the assumptions used to quantify these costs/benefits change. These include: Installation costs: Fire hose reel installation costs may vary particularly between States and Territories, where labour rates vary. Therefore a variation of ± 10% will be assessed. Number of new buildings: Datasets to obtain a national figure of new Class 2 and Class 3 buildings and Class 4 parts is not available. Victorian data has been used and extrapolated to estimate the number of new buildings. This number may vary. Discount rate: A discount rate of 3% and 11% will also be assessed. Number of fire extinguishers required: Option 1 requires fire extinguishers to be installed in accordance with AS2444. Depending on the design of the building, the number of extinguishers may vary. Therefore a variation of 1 and 3 extinguishers required will be assessed. Table 5- Net Present Value Sensitivity Analysis Parameter Net Present Value Hose reels Fire extinguishers Cost saving of Option 1 Discount rate Low (3%) $336,878,789 $56,322,473 +$280,556,316 High (11%) $250,644,817 $41,905,090 +$208,739,727 Installation cost Low (-10%) $259,335,518 $43,357,557 +$215,977,961 High (+10%) $316,965,633 $52,992,569 +$263,973,064 Number of new buildings Low (-10%) $259,336,424 $43,358,080 +215,978,344 High (+10%) $316,964,727 $52,993,209 +263,971,518 Number of fire extinguishers required in lieu of a fire hose reels Low (1) $288,150,576 $24,087,822 +$264,062,754
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