Approaches to project cost estimating have changed in recent years, to the point where smart companies and engineers apply principles of Total Cost Accounting. The term total-cost accounting (TCA) has come to be more commonly known as life-cycle costing (LCC). LCC is a method aimed at analyzing the costs and benefits associated with a piece of equipment, plant or a practice over the entire time of intended use. The idea actually originated in the federal government and was first applied in procuring weapons systems. Experience showed that the up-front purchase price was a poor measure of the total cost. Instead, costs such as those associated with maintainability, reliability, disposal and salvage value, as well as employee training and education, had to be given equal weight in making financial decisions. By the same token, justifying the investment into a piece of requires that all benefits and costs be clearly defined in the most concrete terms possible, and projected over the life of each technology option. The following are important definitions and calculations you should apply when developing cost estimates for equipment and processes that you are considering in a wastewater treatment project.
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