Oklahoma Administrative Code › Title 260 - Office of Management and Enterprise Services › Chapter 65 - Construction and Properties › Subchapter 11 - Life Cycle Costing for State Facilities › Section 260:65-11-2 - Definitions

Current through Vol. 41, No. 20, July 1, 2024
The following words or terms, when used in this Subchapter,
				  shall have the following meaning unless the context clearly indicates
				  otherwise:
"A"
means the amount of money after n years in
				  future.
"a"
means annually recurring costs.
"Annually recurring costs"
means those costs
				  which are incurred each year, usually in an equal amounts, throughout the study
				  period.
"Base year"
means the year in which the Life
				  Cycle Cost analysis is conducted.
"Base year price"
means the price of goods or
				  services as of the beginning of the base year.
"Cash flow"
means the stream of costs and
				  benefits resulting from a project investment.
"Cost escalation rate"
means the rate by which
				  an annual expense is assumed to escalate per year.
"Discounting"
means a technique for converting
				  cash flows occuring over time to time-equivalent values, adjusting for the Time
				  Value of Money.
"E"
means energy costs.
"Economic life"
means the period of time over
				  which a facility or a piece of equipment is considered to have the lowest total
				  cost.
"I"
means investment costs.
"i"
means the interest rate per year.
"Investment costs"
means the initial costs of
				  design, engineering, purchase and installation, all of which are assumed to
				  occur as lump sum at the beginning of the base year for purposes of making the
				  Life Cycle Cost analysis.
"j"
means the cost escalation rate per
				  year.
"LCC"
means life cycle costing.
"Life cycle costing"
means a method of economic
				  evaluation that sums discounted dollar costs of initial investment, operations,
				  maintenance, repair and replacement less salvage value of state facility or
				  equipment over the study period.
"M"
means maintenance and non-fuel operating
				  costs.
"n"
means the number of years in the study
				  period.
"Nonfuel operation and maintenance costs"
means
				  labor and material costs required for routine upkeep and operation, exclusive
				  of energy costs.
"P"
means present worth.
"Present worth"
means the time-equivalent value
				  of past, present or future cash flows as of the beginning of the base
				  year.
"Present worth factor"
means a factor by which
				  annually recurring amounts may be multiplied to find their equivalent Present
				  Worth (see Appendix B of this Chapter).
"Present worth escalating factor"
means a factor
				  by which a non-uniform annual expense, such as energy or labor costs, may be
				  multiplied to find its equivalent present worth (see Appendix B of this
				  Chapter).
"PWEF"
means the present worth escalating
				  factor.
"PWF"
means the present worth factor.
"R"
means the replacement cost.
"Replacement costs"
means the future costs to
				  replace equipment usually at the end of their economic life.
"S"
means the salvage value.
"Salvage values"
means the estimate of future
				  salvage values of items sold as used equipment or scrap usually at the end of
				  their economic life.
"Single present worth"
means a factor by which a
				  single future amount, such as replacement cost or salvage value, may be
				  multiplied to find its equivalent present worth (see Appendix B of this
				  Chapter).
"SPW"
means single present worth.
"State facilities"
means any building or
				  improvement to real property constructed for state use subject to the
				  provisions of Title 61, Oklahoma Statutes. This rule shall apply also to
				  property leased or being prepared for lease by the state.
"Study period"
means the length of time period
				  covered by the economic evaluation. Typically it is equal to the economic life
				  of the evaluation subject.
"Time value of money"
means the time-dependent
				  value of money. The adjustment of cash flows to a common time basis is
				  necessary to take into account the real earning potential of investment over
				  time.
"TLCC"
means total life cycle cost.
"Total life cycle cost"
means the total
				  discounted dollar cost of owning, operating and maintaining a state facility or
				  equipment over the study period.