ASTM E1121-15

Standard Practice for Measuring Payback for Investments in Buildings and Building Systems

SIGNIFICANCE AND USE
5.1 The payback method is part of a family of economic evaluation methods that provide measures of economic performance of an investment. Included in this family of evaluation methods are life-cycle costing, benefit-to-cost and savings-to-investment ratios, net benefits, and internal rates of return.  
5.2 The payback method accounts for all monetary values associated with an investment up to the time at which cumulative net benefits, discounted to present value, just pay off initial investment costs.  
5.3 Use the method to find if a project recovers its investment cost and other accrued costs within its service life or within a specified maximum acceptable payback period (MAPP) less than its service life. It is important to note that the decision to use the payback method should be made with care. (See Section 11 on Limitations.)
SCOPE
1.1 This practice provides a recommended procedure for calculating and applying the payback method in evaluating building designs and building systems.

General Information

• Status: Historical
• Publication Date: 30-Sep-2015
• ICS: 03.060 - Finances. Banking. Monetary systems. Insurance
• ICS: 91.010.99 - Other aspects
• Technical Committee: E06 - Performance of Buildings
• Drafting Committee: E06.81 - Building Economics

Relations

• Replaces: ASTM E1121-12 - Standard Practice for Measuring Payback for Investments in Buildings and Building Systems
• Effective Date: 01-Oct-2015
• Replaced By: ASTM E1121-15(2020)e1 - Standard Practice for Measuring Payback for Investments in Buildings and Building Systems
• Effective Date: 01-Apr-2020
• Referred By: ASTM E1057-15(2020)e1 - Standard Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and Building Systems
• Effective Date: 01-Oct-2015
• Referred By: ASTM E1765-16(2023) - Standard Practice for Applying Analytical Hierarchy Process (AHP) to Multiattribute Decision Analysis of Investments Related to Projects, Products, and Processes
• Effective Date: 01-Oct-2015
• Referred By: ASTM E3130-21 - Standard Guide for Developing Cost-Effective Community Resilience Strategies
• Effective Date: 01-Oct-2015
• Referred By: ASTM E1369-15(2020)e1 - Standard Guide for Selecting Techniques for Treating Uncertainty and Risk in the Economic Evaluation of Buildings and Building Systems
• Effective Date: 01-Oct-2015
• Referred By: ASTM E1185-15(2020)e1 - Standard Guide for Selecting Economic Methods for Evaluating Investments in Buildings and Building Systems
• Effective Date: 01-Oct-2015
• Referred By: ASTM E1557-09(2020)e1 - Standard Classification for Building Elements and Related Sitework—UNIFORMAT II
• Effective Date: 01-Oct-2015
• Referred By: ASTM E1074-15(2020)e1 - Standard Practice for Measuring Net Benefits and Net Savings for Investments in Buildings and Building Systems
• Effective Date: 01-Oct-2015
• Referred By: ASTM E3008/E3008M-16(2023) - Standard Classification for Transportation Surface Elements—UNIFORMAT II
• Effective Date: 01-Oct-2015
• Referred By: ASTM E964-15(2020)e1 - Standard Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems
• Effective Date: 01-Oct-2015
• Referred By: ASTM E2103/E2103M-19 - Standard Classification for Bridge Elements—UNIFORMAT II
• Effective Date: 01-Oct-2015
• Referred By: ASTM E917-17(2023) - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
• Effective Date: 01-Oct-2015
• Referred By: ASTM E2204-15(2020)e1 - Standard Guide for Summarizing the Economic Impacts of Building-Related Projects
• Effective Date: 01-Oct-2015
• Referred By: ASTM E2506-15(2020)e1 - Standard Guide for Developing a Cost-Effective Risk Mitigation Plan for New and Existing Constructed Facilities
• Effective Date: 01-Oct-2015

Standards Content (Sample)

NOTICE: This standard has either been superseded and replaced by a new version or withdrawn.
Contact ASTM International (www.astm.org) for the latest information
Designation: E1121 − 15
Standard Practice for
Measuring Payback for Investments in Buildings and
1
Building Systems
This standard is issued under the fixed designation E1121; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision.Anumber in parentheses indicates the year of last reapproval.A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
1. Scope ogyE631;andforgeneraltermsrelatedtobuildingeconomics,
refer to Terminology E833.
1.1 This practice provides a recommended procedure for
calculating and applying the payback method in evaluating
4. Summary of Practice
building designs and building systems.
4.1 This practice is organized as follows:
4.1.1 Section 2, Referenced Documents—Lists ASTM stan-
2. Referenced Documents
dards and adjuncts referenced in this practice.
2
2.1 ASTM Standards:
4.1.2 Section 3, Definitions—Addresses definitions of terms
E631Terminology of Building Constructions
used in this practice.
E833Terminology of Building Economics
4.1.3 Section 4, Summary of Practice—Outlines the con-
E917Practice for Measuring Life-Cycle Costs of Buildings
tents of the practice.
and Building Systems
4.1.4 Section 5, Significance and Use—Explains the signifi-
E964Practice for Measuring Benefit-to-Cost and Savings-
cance and use of this practice.
to-Investment Ratios for Buildings and Building Systems
4.1.5 Section 6, Procedures—Describes step-by-step the
E1057Practice for Measuring Internal Rate of Return and
procedures for making economic evaluations of buildings.
Adjusted Internal Rate of Return for Investments in
4.1.6 Section 7, Objectives, Alternatives, and Constraints—
Buildings and Building Systems
Identifies and gives examples of objectives, alternatives, and
E1074Practice for Measuring Net Benefits and Net Savings
constraints for a payback evaluation.
for Investments in Buildings and Building Systems
4.1.7 Section 8, Data and Assumptions—Identifies data
E1185Guide for Selecting Economic Methods for Evaluat-
needed and assumptions that may be required in a payback
ing Investments in Buildings and Building Systems
evaluation.
E1369Guide for Selecting Techniques for Treating Uncer-
4.1.8 Section 9, Compute Payback Period—Presents alter-
tainty and Risk in the Economic Evaluation of Buildings
native approaches for finding the payback period.
and Building Systems
4.1.9 Section 10, Applications—Explains the circumstances
2.2 Adjuncts:
for which the payback method is appropriate.
Discount FactorTablesAdjunct to Practices E917, E964,
4.1.10 Section 11, Limitations—Discusses the limitations of
3
E1057, E1074, and E1121
the payback method.
3. Terminology 5. Significance and Use
3.1 Definitions—For definitions of general terms related to 5.1 The payback method is part of a family of economic
building construction used in this practice, refer to Terminol-
evaluation methods that provide measures of economic perfor-
mance of an investment. Included in this family of evaluation
methods are life-cycle costing, benefit-to-cost and savings-to-
1
investment ratios, net benefits, and internal rates of return.
This practice is under the jurisdiction of ASTM Committee E06 on Perfor-
mance of Buildings and is the direct responsibility of Subcommittee E06.81 on
5.2 The payback method accounts for all monetary values
Building Economics.
associated with an investment up to the time at which cumu-
Current edition approved Oct. 1, 2015. Published October 2015. Originally
approved in 1986. Last previous edition approved in 2012 as E1121–12. DOI:
lative net benefits, discounted to present value, just pay off
10.1520/E1121-15.
initial investment costs.
2
For referenced ASTM standards, visit the ASTM website, www.astm.org, or
contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM
5.3 Use the method to find if a project recovers its invest-
Standards volume information, refer to the standard’s Document Summary page on
ment cost and other accrued costs within its service life or
the ASTM website.
3
within a specified maximum acceptable payback period
Available from ASTM International Headquarters. Order Adjunct No.
ADJE091703. (MAPP)lessthanitsservicelife.Itisimportanttonotethatthe
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
1

---------------------- Page: 1 ----------------------
E1121 − 15
decision to use the payback method should be made with care. 9. Compute Payback Period
(See Section 11 on Limitations.)
9.1 The payback method finds the length of time (usually
specified in years) between the date of the initial project
6. Procedures
investment and the date when the present value of cumulative
6.1 Therecommendedstepsformakinganeconomicevalu-
future earnings or sa
...

This document is not an ASTM standard and is intended only to provide the user of an ASTM standard an indication of what changes have been made to the previous version. Because
it may not be technically possible to adequately depict all changes accurately, ASTM recommends that users consult prior editions as appropriate. In all cases only the current version
of the standard as published by ASTM is to be considered the official document.
Designation: E1121 − 12 E1121 − 15
Standard Practice for
Measuring Payback for Investments in Buildings and
1
Building Systems
This standard is issued under the fixed designation E1121; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
1. Scope
1.1 This practice provides a recommended procedure for calculating and applying the payback method in evaluating building
designs and building systems.
2. Referenced Documents
2
2.1 ASTM Standards:
E631 Terminology of Building Constructions
E833 Terminology of Building Economics
E917 Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
E964 Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems
E1057 Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and
Building Systems
E1074 Practice for Measuring Net Benefits and Net Savings for Investments in Buildings and Building Systems
E1185 Guide for Selecting Economic Methods for Evaluating Investments in Buildings and Building Systems
E1369 Guide for Selecting Techniques for Treating Uncertainty and Risk in the Economic Evaluation of Buildings and Building
Systems
2.2 Adjuncts:
3
Discount Factor Tables Adjunct to Practices E917, E964, E1057, E1074, and E1121
3. Terminology
3.1 Definitions—For definitions of general terms related to building construction used in this practice, refer to Terminology
E631; and for general terms related to building economics, refer to Terminology E833.
4. Summary of Practice
4.1 This practice is organized as follows:
4.1.1 Section 2, Referenced Documents—Lists ASTM standards and adjuncts referenced in this practice.
4.1.2 Section 3, Definitions—Addresses definitions of terms used in this practice.
4.1.3 Section 4, Summary of Practice—Outlines the contents of the practice.
4.1.4 Section 5, Significance and Use—Explains the significance and use of this practice.
4.1.5 Section 6, Procedures—Describes step-by-step the procedures for making economic evaluations of buildings.
4.1.6 Section 7, Objectives, Alternatives, and Constraints—Identifies and gives examples of objectives, alternatives, and
constraints for a payback evaluation.
4.1.7 Section 8, Data and Assumptions—Identifies data needed and assumptions that may be required in a payback evaluation.
4.1.8 Section 9, Compute Payback Period—Presents alternative approaches for finding the payback period.
4.1.9 Section 10, Applications—Explains the circumstances for which the payback method is appropriate.
4.1.10 Section 11, Limitations—Discusses the limitations of the payback method.
1
This practice is under the jurisdiction of ASTM Committee E06 on Performance of Buildings and is the direct responsibility of Subcommittee E06.81 on Building
Economics.
Current edition approved April 1, 2012Oct. 1, 2015. Published April 2012October 2015. Originally approved in 1986. Last previous edition approved in 20072012 as
ε1
E1121 – 07E1121 – 12. . DOI: 10.1520/E1121-12.10.1520/E1121-15.
2
For referenced ASTM standards, visit the ASTM website, www.astm.org, or contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM Standards
volume information, refer to the standard’s Document Summary page on the ASTM website.
3
Available from ASTM International Headquarters. Order Adjunct No. ADJE091703.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
1

---------------------- Page: 1 ----------------------
E1121 − 15
5. Significance and Use
5.1 The payback method is part of a family of economic evaluation methods that provide measures of economic performance
of an investment. Included in this family of evaluation methods are life-cycle costing, benefit-to-cost and savings-to-investment
ratios, net benefits, and internal rates of return.
5.2 The payback method accounts for all monetary values associated with an investment up to the time at which cumulative net
benefits, discounted to present value, just pay off initial investment costs.
5.3 Use the method to find if a project recovers its investment cost and other accrued costs within its service life or within a
specified maximum acceptable payback period (MAPP) less than its service life. It is important to note that the decision to use the
...