Life cycle costing Flashcards
1
Q
Life cycle costing
A
The process of identifying all the costs associated with a particular project, product or service from the start of its development to the end of its life
2
Q
Disadvantages of life cycle costing
A
3
Q
Advantages of life cycle costing
A
4
Q
What is a Discounted Cashflow
A
-A method of evaluating an investment by determining its value today based on its expected future cash flows.
-Allows us to take account of the time value of money.
-If the DCF is above the current cost of the investment, then it should result in positive returns and as such would generally be considered a good investment
5
Q
How to work out the Discounted cashflow(DCF)
A
Cashflow x discount factor
6
Q
A
