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Life Cycle Cost In The Built Environment, Actualization, Inflation And The Money Value Over Time

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  • CARAIMAN ADRIAN-COSMIN

    (POLITEHNICA UNIVERSITY OF TIMISOARA, TIMISOARA, ROMANIA)

  • DAN SORIN

    (POLITEHNICA UNIVERSITY OF TIMISOARA, FACULTY OF CIVIL ENGINEERING, CIVIL ENGINEERING AND SERVICES DEPARTMENT, TIMISOARA, ROMANIA)

  • PESCARI SIMON

    (POLITEHNICA UNIVERSITY OF TIMISOARA, FACULTY OF CIVIL ENGINEERING, CIVIL ENGINEERING AND SERVICES DEPARTMENT, TIMISOARA, ROMANIA)

Abstract

The money value over time refers to investments and price changes over time. Generally speaking, investments increase in value at a percentage rate of return and alternatives or options are assessed on the basis of the notional return on the estimated investment, if the amount had been invested rather than spent on the option under consideration. The percentage return used in the LCC to bring such future costs to current values is called the discount rate. Inflation is an increase in the overall price level, reflecting a decrease in the purchasing power of money, while inflation rates for various elements are not constant. In general, products manufactured by high technology tend to lower their price over time; fuel prices rise when gross product becomes scarcer, and labour prices tend to rise in line with improved productivity. Under this article we will address issues related the life cycle cost (LCC) in the built environment, life cycle cost tools in a feasibility study as well as the benefits and weaknesses of using LCC in a feasibility study.

Suggested Citation

  • Caraiman Adrian-Cosmin & Dan Sorin & Pescari Simon, 2023. "Life Cycle Cost In The Built Environment, Actualization, Inflation And The Money Value Over Time," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 2, pages 139-146, April.
    • Handle: RePEc:cbu:jrnlec:y:2023:v:2:p:139-146
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