## 2 Framework
### Data Collection
#### 2.1.2 Life Cycle Cost  
It is essential to evaluate the economic performance of energy retrofit measures to increase the financial benefits. Life cycle cost (LCC), which is the sum of all costs incurred during the lifetime of an item, allows for the decision maker to compare between different retrofits measures. LCC provides comparisons between the energy retrofit measures that have the same performance but have different initial and operation costs. The primary objective to use LCC analysis is to improve risk management by assessing future expenses to allocate the budget. LCC analysis can be applied as a method to enhance the decision-making tools by providing more sustainable solutions. In the following the different components of LCC will be presented [25]. The initial investment cost is the capital required to implement the retrofitting. It includes all the costs of planning, architectural design, structural design, and construction. The initial cost also comprises all the costs of paying for the equipment, such as the purchase price and taxes. Operation costs include all annual expenses associated with the operation of the building, such as cleaning, electricity, gas and water, administration, property management, and maintenance costs (repair, replacement, and adaptation of the asset). End-of-Life Costs  
These include the cost of recycling, decommissioning, demolition, and disposal inspection's residual value and salvage value. LCC Calculation  
LCC is the discounted present value of all future cashflows incurred during the study period [26]. According to the North American leading construction and building cost estimation software and database RSMeans, LCC Equation (1) is as follows [27]:  
\[\text{LCC}=\text{I}+\text{Repl}-\text{Res}+\text{E}+\text{W}+\text{OM}\&\text {R}+\text{O} \tag{1}\]  
where, LCC is the total life cycle cost in present value (PV) dollars of a given alternative; I is the initial cost; Repl is the replacement costs in the present value; Res is the residual value (resale value and salvage value); E is the energy costs in the present value; W is the total water costs in the present value; OM&R is total costs of the operation, maintenance, and repair of the present value; and O is the total other costs, such as contract administration costs and salaries, in the present value. For each year, cash flows (CFs) are calculated and then multiplied by the present value factor (Equation (2)) to convert their values to present values. \[\text{PV Factor}\left(\text{P}/\text{F},\text{i}\%,\text{k}\right)=\text{I} /(\text{I}+\text{i})\text{k} \tag{2}\]  
where i equals the discount rate and k is the year in which the cashflow is incurred. The sum of the CFs along the study period is the LCC of the alternative [25]. \[\text{LCC}=\sum_{\text{K}=0}^{\text{N}}\text{CF}*(\text{P}/\text{F},\text{i} \%,\text{k}) \tag{3}\]Several parameters must be identified before calculating the LCC, such as base date, sunk cost, study period, inflation and interest or discount rate, and salvage value. To compare the different retrofitting plans, the same mentioned parameters must be used [28]. Base date: The point in time at which all the retrofitting plan cashflows are discounted. For building retrofitting projects, the base date is when retrofitting plans are generated. Sunk cost: \"[A] cost that has occurred in the past and has no relevance to estimates of future costs and revenues related to the alternatives\" [25]. In other words, it should not be included in the LCC calculation. For example, the purchase price of the existing HVAC system is considered as a sunk cost. Study period: The length of time from the base date to the end date of the economic analysis. For the different retrofitting plans, the study period should be the same. If the retrofitting plans have different life spans, the study period should be equal to the most extended lifespan of the alternative [28]. Discount rate: The factor at which all future (either positive or negative) cashflows are converted to the present value.