Building economics : theory and practice

1. Building Economics at a Glance 2. Life-Cycle Cost (LCC) 3. Net Benefit (NB) and Net Savings (NS) 4. Benefit-to-Cost Ratio (BCR) and Savings-to-Investment Ratio (SIR) 5. Internal Rate of Return (IRR) 6. Overall Rate of Return (ORR) 7. Payback (PB) 8. Adjusting Dollar Amounts for Time of Occurrence 9. Treatment of Price Changes 10. Setting the Study Period 11. Selecting a Discount Rate or MARR 12. Estimating Costs and Benefits 13. Accounting for Taxes and Financing 14. Risk Exposure and Risk Attitude 15. Conservative Estimating, Breakeven Analysis, and Sensitivity Analysis 16. Risk-Adjusted Discount Rate and Certainty Equivalent Techniques 17. Decision Analysis, Simulation, and Other Techniques 18. Selecting the Best Technique 19. Selection of Building Designs and Building Components 20. Decision to Accept or Reject a Project 21. Decisions on Building Location 22. Lease or Buy Decisions 23. Economic Size of Building Components 24. Allocating Limited Budgets Among Competing Projects 25. Decisions on Timing of Equipment Replacements 26. Selecting Combinations of Interdependent Systems

Buildings today serve multiple purposes beyond shelter, including life support systems, communication terminals, and data manufacturing centers. They are expensive tools that require constant adjustment to function efficiently. The economics of building has become as complex as its design, with buildings lasting longer than their builders. Creative economics has become as important as creative design and building, involving builder, contractor, architect, and facilities manager in their lifetime. The cost of building cannot be left to chance or act of god. Solutions to building problems are no longer as simple as those proposed by a Florentine builder in the 15th century, such as centering the dome of S. Maria de I Fiore on a mound of earth mixed with pennies. This was a serious suggestion before Brunelleschi solved the problem more sensibly.