What Does Life Cycle Cost Mean

Life cycle cost (LCC) is an approach that assesses the total cost of an asset over its life cycle including initial capital costs, maintenance costs, operating costs and the asset’s residual value at the end of its life.

What is the meaning of life cycle cost?

Life cycle cost (LCC) is an approach that assesses the total cost of an asset over its life cycle including initial capital costs, maintenance costs, operating costs and the asset’s residual value at the end of its life.

Why is life cycle cost important?

Businesses that deploy long-range planning, heavily use the life cycle costing. It helps them to maximize their long-term profits. A business that does not consider LCC as important may likely buy assets at a lower cost. They, however, ignore the costs that they may have to incur during the asset’s useful lives.