Net Present Value (NPV)
NPV = Σ [CF_t / (1 + r)^t] − Initial Cost
• CF_t: Cash flow in year t ($)
• r: Discount rate (decimal)
• t: Year number
• Initial Cost: Capital investment ($)
Example: Annual savings = $50,000, r = 5%, 20 years, Initial cost = $500,000
→ NPV = $50,000 × [(1−(1.05)⁻²⁰)/0.05] − $500,000 = $623,111 − $500,000 = +$123,111
💡 Positive NPV = project is economically viable.
Life Cycle Cost
LCC = Capital cost + PV(O&M costs) + PV(Replacement costs) − PV(Salvage value)
• Capital cost: Initial investment ($)
• PV: Present value of future costs ($)
• O&M: Operations and maintenance costs ($/yr)
Example: Capital = $1M, PV(O&M) = $800K, PV(Replacement) = $200K, PV(Salvage) = $50K
→ LCC = $1,000,000 + $800,000 + $200,000 − $50,000 = $1,950,000
💡 Use LCC to compare alternatives over their full service life.
Energy Intensity
Energy intensity (kWh/m³) = Total energy use (kWh/d) / Flow treated (m³/d)
• Total energy use: Facility-wide energy consumption (kWh/d)
• Flow treated: Average daily flow (m³/d)
Example: Energy = 5,000 kWh/d, Flow = 10,000 m³/d
→ Energy intensity = 5,000 / 10,000 = 0.5 kWh/m³
💡 Benchmark: 0.3–0.6 kWh/m³ for secondary treatment. Advanced: 0.6–1.0 kWh/m³.
Unit Cost of Treatment
Unit cost ($/m³) = Total annual cost ($) / Annual volume treated (m³)
• Total annual cost: All operating + capital costs ($)
• Annual volume: Total flow treated per year (m³)
Example: Annual cost = $2,000,000, Annual volume = 3,650,000 m³
→ Unit cost = $2,000,000 / 3,650,000 = $0.548/m³
💡 Typical range: $0.20–$1.50/m³ depending on treatment level and plant size.