ABSTRACT
ABSTRACT: The application of the net present value method for the calculation of life-cycle costs provides a deterministic calculation where each computation step results in a single net present value that is associated with many uncertainties whilst allowing no conclusion as to the chances seized or risks taken. In fact, this single value represents only one of many possible scenarios that might arise from the combination of the input variables. The use of Monte-Carlo simulations can systematically account for uncertainties that input variables are associated with. This method allows to consider varying anticipated service lives of structural components, and distribution functions can be applied to costs, rehabilitation intervals and – last but not least – the computed interest rate. This approach delivers a larger amount of information whilst also increasing the level of decision confidence.
