LIFE CYCLE COSTING

PROJECT COST MANAGEMENT- LIFE CYCLE COSTING

Assignment Aim

To understand and apply the processes for life cycle costing.

 

Assignment Details

 

You are contemplating the purchase of a new SUV for family use. You are to choose a new model and perform a Life Cycle Costing calculation using the Net Present Value method ( NPV) to determine its life cycle costs, over a period of 6 years.

 

The vehicle is NOT to be purchased by leasing or by loan. As the SUV is for private use only you should ignore any tax implications in your life cycle costing, but must consider the resale value.

 

As a minimum you must provide the following information:

 

  • a detailed description of ALL your assumptions
  • a detailed explanation and breakdown of all costs and values used in your costing (do NOT use published all-inclusive rates per kilometre for running expenses)
  • sources for ALL the data used (with sources, properly referenced and screen shots).
  • a comprehensive explanation (with sources, properly referenced and screen shots) for your choice of discount rate and method for handling inflation
  • a single A4 spreadsheet for the LCC which shows all the relevant costs and values for the full life cycle as well as the discounting calculations. The spreadsheet is to be in landscape layout, titled and use the following general layout for information:
  • a detailed commentary on the outcome of the life cycle costing exercise, identifying ownership costs

 

The assignment is to be presented in the form of a report (including an executive summary, numbered sections and headers and footers). The number of words must be between 1400 and 1800 in total (including any tables, contents page, headers, footers and references, but excluding the cover sheet, screen shots and the A4 spreadsheet). The word count must be stated on the front cover.

Hint

Student marks for the assignment will be reduced where the assignment is outside the word count maximum or minimum. The amount of penalty will be related to the number of words (deduct 5 marks if up to 200 words over or under, 10 marks if 201-400 words over or under, 20 if 401-600 words over or under, 50 marks if more than 600 words over or under).

 

Assignment Format

The assignment must be typed on A4 paper (using one side only of each sheet) in one-and-a-half space typing using arial font 11 and presented with a cover sheet setting out your name, lecturer’s name, unit title and the topic of the assignment. All pages should be numbered. All assignments should be thoroughly checked for typing, spelling and grammatical errors before being submitted and use the Chicago Author-Date 16th Edition format (See the Library style guide) for all referencing

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