For example, think of a car. The car's price tag is only part of the car's overall life cycle cost. You also need to consider expenses for car insurance, interest, gas, oil changes, and any other necessary maintenance to keep the car running. Not planning for these additional costs can set you back.
What do life cycle costs include?
Life-cycle cost (LCC) can be defined as the cost to the government of a program over its full life, including costs for research and development; testing; production; facilities; operations; maintenance; personnel; environmental compliance; and disposal.
How is life cycle calculated?
LCC = C+PV Recurring – PV Residual Value\n\n LCC is the life cycle cost. C is the 0-year construction cost. PV recurring is the present value of all recurring cost. PV residual value is the present value of residual value.