Prediction method of real discount rate to improve accuracy of life-cycle cost analysis

Lee, Chijoo

doi:10.1016/j.enbuild.2016.11.020

Cited by 20 publications

(2 citation statements)

References 28 publications

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“…In addition, most studies use the discount rate to consider both interest rate and inflation rate to comprehensively consider the time value of money. The discount rate ranges from 0.0025% to 15%, depending mainly on the local economic development speed and the risk degree (C. Lee & E. B. Lee, 2017). In addition, several studies have compared the effects of different discount rates on LCC results and found the effects to be substantial (Jausovec & Sitar, 2019;Phillips et al, 2020).…”

Section: Time Valuementioning

confidence: 99%

A Review on Life Cycle Cost Analysis of Buildings Based on Building Information Modeling

Deng

Jiang

et al. 2023

Journal of Civil Engineering and Management

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Life cycle cost analysis (LCCA) plays an essential role in the economic sustainability assessment of buildings, and building information modeling (BIM) offers a potentially valuable approach to fulfilling its requirement. However, the state of LCCA based on BIM is unclear despite previously published works. Therefore, this paper aims to address this gap by reviewing 45 relevant peer-reviewed articles through a systematic literature search, selection, and assessment. The results show that three data exchange methods integrate BIM and LCCA through data input, calculation, and output. Precision management, optimization measures, and parameter analysis through BIM significantly improve the value of buildings. Also, a methodological framework is summarized that combines LCC with other indicators based on BIM to consider economic, environmental, and social impacts, which can be monetized to assess life cycle sustainability costs. These findings provide insights for scholars and practitioners.

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Section: Time Valuementioning

confidence: 99%

A Review on Life Cycle Cost Analysis of Buildings Based on Building Information Modeling

Deng

Jiang

et al. 2023

Journal of Civil Engineering and Management

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“…Much research has been conducted for choosing the appropriate discount rate of the projects. Lee and Lee (2017) proposed a method to predict the real discount rate. Jagannathan et al (2016) concluded that firms use higher discount rates which are approximately twice the firms' capital cost.…”

Section: Duration and Sensitivity Of The Project Returns To Changes In Discount Ratesmentioning

confidence: 99%

Application of Duration Measure in Quantifying the Sensitivity of Project Returns to Changes in Discount Rates

Yousefi

Yakhchali

Tamošaitienė

2019

Administrative Sciences

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In this research, the concept of Duration with a new application in project management has been defined. The Duration of each project provides the project manager with a combined measure containing concepts of return, cost and time of the project. Further in this article, the changes in project return, based on different assumptions such as discount rate, have been examined. To examine the effect of the changes in these factors, the Monte Carlo simulation has been used. The relationship between these factors is nonlinear which reflects the great importance of investment on appropriate risk management systems. The data from a set of construction projects have been used in order to verify the results of this study. Similar relationships can be expected to exist in other industries as well.

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Life cycle cost analysis (LCCA) of construction projects: sustainability perspective

Altaf

Alaloul

Musarat

et al. 2022

Environ Dev Sustain

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Prediction method of real discount rate to improve accuracy of life-cycle cost analysis

Cited by 20 publications

References 28 publications

A Review on Life Cycle Cost Analysis of Buildings Based on Building Information Modeling

A Review on Life Cycle Cost Analysis of Buildings Based on Building Information Modeling

Application of Duration Measure in Quantifying the Sensitivity of Project Returns to Changes in Discount Rates

Life cycle cost analysis (LCCA) of construction projects: sustainability perspective

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