ABSTRACT
A proper economic analysis should be conducted for every pavement construction project. In order to conduct economic analysis, it is necessary to understand some key concepts and the techniques that help us to compare alternatives on the basis of economics and have reasonable estimates of different types of costs associated with pavement projects. The economic evaluation of the different alternatives must consider accurate estimates of economic variables and costs and benefits associated with the pavement. Life cycle cost (LCC) analysis provides a rational method of conducting such economic analysis. The different steps involved in LCC analysis are establishing alternatives, determining timings of activities, estimating costs, and computing the costs, respectively. Two of the more commonly used economic indicators are the net present value (NPV) or net present worth (NPW) and equivalent uniform annual cost (EUAC). NPV is the discounted monetary value of expected net benefits.
