Life Cycle Cost Analysis

A church school is considering refurbishing the lighting system in its administration building. After initial investigation, the school procurement office has narrowed down the options to two.

• Option 1 is an Ergolight^® system that costs $500,000 to purchase and install.
• Option 2 is a conventional system that costs $100,000 to purchase and install.

Both systems are expected to last for twenty years.

• The energy and maintenance costs for Option 1 are $20,000 and $2,000, respectively.
• The energy and maintenance costs for Option 2 are $50,000 and $10,000.

Assume that all costs are to be paid at the end of the year, and the real discount rate is 4 percent.

Create an Excel Spreadsheet in which you address the following:

• Which lighting system should the school select based on financial considerations? Use the LCC method to address this question.
• What is capital budgeting? How does it relate to the mission and strategic planning of a nonprofit?
• What are the major sources of financing for capital projects?

Note: The LCC method of calculations should be shown on the spreadsheet, followed by responses to the posted questions.

Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code "Newclient" for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.