ABSTRACT
This chapter discusses the time value of money as well as how discounting should be carried out so that the estimated life cycle cost is consistent with the methodology employed. Discounting will depend on the type of life cycle costing (LCC) carried out as well as the dominant environmental impacts, and is an iterative procedure requiring a sensitivity analysis and peer review. The need to consider LCC from the perspective of who bears the cost is highlighted in a case study. Explanations are given as to when it is appropriate to include taxes, tariffs, and externalities such as willingness-to-pay values. The aggregation of costs is also summarized.
