What does life cycle cost mean?
Life cycle costing, or whole-life costing, is the process of estimating how much money you will spend on an asset over the course of its useful life.
Whole-life costing covers an asset’s costs from the time you purchase it to the time you get rid of it.
The cost to buy, use, and maintain a business asset adds up..
How is life cycle cost calculated?
Basic Life-Cycle Cost Analysis Calculation Basically, LCCA consists of adding all the initial and ongoing costs of the structure, product, or component over the time you expect to be using it, subtracting the value you can get out of it at the end of that time, and adjusting for inflation.
What is life cycle costing and why is it used?
Life cycle costing is the process of compiling all costs that the owner or producer of an asset will incur over its lifespan. … In the engineering and production areas, life cycle costing is used to develop and manufacture goods that will have the least cost to the customer to install, operate, maintain, and dispose of.
What is a life cycle definition?
A life cycle is a course of events that brings a new product into existence and follows its growth into a mature product and eventual critical mass and decline. The most common steps in the life cycle of a product include product development, market introduction, growth, maturity, and decline/stability.