Life Cycle Equation

LCC = A =(E1) (PWF1) + (Ek)(PWFk) - (S)(PWFn)

Where: -
LCC = Life Cycle Costs
Ek = Maintenance cost in year k
PWFi = Present Worth Factor
N = Analysis Period
A = Initial Cost
S = Salvage Value

Option A: -

Design life = 25 years

Capital cost = $65
Electricity demand = 11 watts = 0.011 Kilowatts
Electricity cost = (Electricity Demand X Cost of Electricity per KW hour) = 0.011 x 6
= 0.066 cents/hour
Total number of hours = 2100 x 24 = 50400 hours
Actual cost of Electricity for its total life span = 0.066 x 50400 = 3,326.4
cents=$33.26 Total Life Cycle cost=$65 + $33.26 = $98.26
Option B: -
Design life = 3 years
Capital cost = $4.75
Actual Capital Cost for 24 years = 24/3 x 4.75 = $38
Electricity demand = 32 watts = 0.032 Kilowatts
Electricity cost = (Electricity Demand X Cost of Electricity per KW hour) = 0.032 x 6
= 0.192 cents/hour
Total number of hours = 2100 x 24 = 50400 hours
Actual cost of Electricity for its total life span = 0.192 x 50400 = 9,676.8
cents=$96.76 Total Life Cycle cost=$38 + $96.76 = $134.76

Option C: -
Design life = 1 years
Capital cost = $1.50
Actual Capital Cost for 24 years = 24/1 x 1.50 = $36
Electricity demand = 100 watts = 0.01 Kilowatts
Electricity cost = (Electricity Demand X Cost of Electricity per KW hour) = 0.1 x 6 =
0.6 cents/hour
Total number of hours = 2100 x 24 = 50400 hours
Actual cost of Electricity for its total life span = 0.6 x 50400 = 30,240 cents = $302
Total Life Cycle cost=$36 + $302 = $338

Based on the lowest life cycle cost, option A is recommended.