ASTM-E1121 Standard Practice for Measuring Payback for Investments in Buildings and Building Systems

ASTM-E1121 - 2015 R20(E1) EDITION - CURRENT
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Standard Practice for Measuring Payback for Investments in Buildings and Building Systems
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Scope

1.1 This practice provides a recommended procedure for calculating and applying the payback method in evaluating building designs and building systems.

Significance and Use

5.1 The payback method is part of a family of economic evaluation methods that provide measures of economic performance of an investment. Included in this family of evaluation methods are life-cycle costing, benefit-to-cost and savings-to-investment ratios, net benefits, and internal rates of return.

5.2 The payback method accounts for all monetary values associated with an investment up to the time at which cumulative net benefits, discounted to present value, just pay off initial investment costs.

5.3 Use the method to find if a project recovers its investment cost and other accrued costs within its service life or within a specified maximum acceptable payback period (MAPP) less than its service life. It is important to note that the decision to use the payback method should be made with care. (See Section 11 on Limitations.)

Keywords

benefit-cost analysis; building economics; economic evaluation methods; engineering economics; investment analysis; life-cycle cost analysis; maximum acceptable payback period; net benefits; net savings; payback; sensitivity analysis; simple payback;

To find similar documents by ASTM Volume:

04.11 (Building Constructions (I): E72 - E2110)

To find similar documents by classification:

03.060 (Finances. Banking. Monetary systems. Insurance Including personal financial planning Information technology applications in banking, see 35.240.40)

91.010.99 (Other aspects)

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Document Number

ASTM-E1121-15

Revision Level

2015 R20(E1) EDITION

Status

Current

Modification Type

Revision

Publication Date

May 5, 2020

Document Type

Practice

Page Count

9 pages

Committee Number

E06.81