Determine the life cycle costs for Alternative A,Alternative B,Alternative C and which alternative you would recommend to the owner.

The LCC example below summarizes three alternatives being considered

Alternative A: do nothing

Alternative B: Renovate existing facility

Alternative C and D: Demolish existing facility and build new facility

The costs (and salvage value if any) over the assumed 25 year for each alternative are given in the table below. Assume a 10 % discount rate compounded annually

The initial costs for the three alternatives at time t=0 are given below (Note that GSF = Gross square foot):

Initial Cost

Construction CostQuantity GSFPrice/GSF

A. Existing Nursing Towers200,0000

B. Renovate Nursing Towers200,000$100.00

C. Build New Nursing Towers180,000$225.00

D. Demolish Existing Nursing Towers200,000$25.00

The equipment replacement costs and salvage value (where applicable) are given below:

Cost of Replacement or Salvage Value

Description Years to be Replaced or Salvaged Alternate A Alternate BAlternate C

Air handling Unit5 $2,000,000 $2,000,0000

Re-roof Nursing Towers10 0 $250,000 $500,000

Salvage Value (New @ 50%)25 0 0$20,000,000

The annual costs for each alternative are given in the table below:

DescriptionAlternate AAlternate BAlternate C

Annual Energy Cost$1,500,000$1,250,000$1,000,000

M & R Cost$1,750,000$1,400,000$700,000

Staffing Cost$10,000,000$9,000,000$7,500,000

Determine the life cycle costs for Alternative A, Alternative B, Alternative C and which alternative you would recommend to the owner.