In the PJM Objective 4.2 – Changes in Scope During Design video, it is stated that a Life Cycle Cost Analysis (LCCA) includes initial cost, operational cost, maintenance cost, and replacement cost. However, in the CE Mock Exam #1, there is a question about LCCA for an emergency back-up generator where the answer explanation states that replacement cost is not included in the analysis. This seems to conflict with the information presented in the PJM video.
Could you please clarify whether replacement cost should be included in an LCCA?
Great question, @elie! There is a lot of conflicting information about this exact topic because a LCCA could include replacement costs, or not. The key, however, is to ensure that you are consistent when doing a LCCA to compare multiple options (either you include the replacement costs of all options, or you don’t) so that you are doing an apples-to-apples comparison.
The practice exam question asks which items must be included. Of the options provided, replacement cost is not a ‘must’ in the analysis. We will add this clarification to the answer explanation.
Hope this helps!
Kiara Galicinao, AIA, NCARB
Product Coordinator Black Spectacles