PROJECT COST MANAGEMENT - LIFE CYCLE COSTING

Assignment Aim

To understand and apply the processes for life cycle costing.

Assignment Details

You are contemplating the purchase of a new SUV for family use. You are to choose a new model and perform a Life Cycle Costing calculation using the Net Present Value method to determine its life cycle costs, over a period of 6 years.

The vehicle is NOT to be purchased by leasing or by loan. As the SUV is for private use only you should ignore any tax implications in your life cycle costing, but must consider the resale value.

As a minimum you must provide the following information:

- a detailed description of ALL your assumptions

- a detailed explanation and breakdown of all costs and values used in your costing (do NOT use published all-inclusive rates per kilometre for running expenses)

- Sources for ALL the data used(with sources, properly referenced or screen shots).
- a comprehensive explanation (with sources, properly referenced or screen shots) for your choice of discount rate and method for handling inflation

- asingle A4 spreadsheet for the LCC which shows all the relevant costs and values for the full life cycle as well as the discounting calculations. The spreadsheet is to be in landscape layout, titled and use the following general layout for information:

- a detailed commentary on the outcome of the life cycle costing exercise, identifying ownership costs

The assignment is to be presented in the form of a report (including an executive summary, numbered sections and headers and footers).

The number of words must be between 1400 and 1800 in total (including any tables, contents page, headers, footers and references, but excluding the cover sheet, screen shots and the A4 spreadsheet). The word count must be stated on the front cover. Student marks for theassignment will be reduced where the assignment is outside the word count maximum or minimum.The amount of penalty will be related to the number of words(deduct 5 marks if up to 200 words over or under, 10 marks if 201-400 words over or under, 20 if 401-600 words over or under, 50 marks if more than 600 words over or under).