ASTM E1121-02

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

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: 09-Oct-2002
• 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 E1121-98 - Standard Practice for Measuring Payback for Investments in Buildings and Building Systems
• Effective Date: 10-Oct-2002
• Replaced By: ASTM E1121-07 - Standard Practice for Measuring Payback for Investments in Buildings and Building Systems
• Effective Date: 01-Apr-2007
• Referred By: ASTM E1185-15(2020)e1 - Standard Guide for Selecting Economic Methods for Evaluating Investments in Buildings and Building Systems
• Effective Date: 10-Oct-2002
• Referred By: ASTM E2103/E2103M-19 - Standard Classification for Bridge Elements—UNIFORMAT II
• Effective Date: 10-Oct-2002
• 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: 10-Oct-2002
• Referred By: ASTM E2204-15(2020)e1 - Standard Guide for Summarizing the Economic Impacts of Building-Related Projects
• Effective Date: 10-Oct-2002
• Referred By: ASTM E3130-21 - Standard Guide for Developing Cost-Effective Community Resilience Strategies
• Effective Date: 10-Oct-2002
• Referred By: ASTM E1557-09(2020)e1 - Standard Classification for Building Elements and Related Sitework—UNIFORMAT II
• Effective Date: 10-Oct-2002
• Referred By: ASTM E3008/E3008M-16(2023) - Standard Classification for Transportation Surface Elements—UNIFORMAT II
• Effective Date: 10-Oct-2002
• 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: 10-Oct-2002
• 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: 10-Oct-2002
• 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: 10-Oct-2002
• 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: 10-Oct-2002
• Referred By: ASTM E917-17(2023) - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
• Effective Date: 10-Oct-2002
• 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: 10-Oct-2002

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:E 1121–02
Standard Practice for
Measuring Payback for Investments in Buildings and
1
Building Systems
This standard is issued under the fixed designation E 1121; 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 (e) indicates an editorial change since the last revision or reapproval.
1. Scope 4.1.4 Section 5, Significance and Use—Explains the signifi-
cance and use of this practice.
1.1 This practice provides a recommended procedure for
4.1.5 Section 6, Procedures—Describes step-by-step the
calculating and applying the payback method in evaluating
procedures for making economic evaluations of buildings.
building designs and building systems.
4.1.6 Section 7, Objectives, Alternatives, and Constraints—
2. Referenced Documents Identifies and gives examples of objectives, alternatives, and
constraints for a payback evaluation.
2.1 ASTM Standards:
2
4.1.7 Section 8, Data and Assumptions—Identifies data
E833 Terminology of Building Economics
needed and assumptions that may be required in a payback
E917 PracticeforMeasuringLife-CycleCostsofBuildings
2
evaluation.
and Building Systems
4.1.8 Section 9, Compute Payback Period—Presents alter-
E964 Practice for Measuring Benefit-to-Cost and Savings-
2
native approaches for finding the payback period.
to-Investment Ratios for Buildings and Building Systems
4.1.9 Section 10, Applications—Explains the circumstances
E1057 Practice for Measuring Internal Rate of Return and
for which the payback method is appropriate.
Adjusted Internal Rate of Return for Investments in Build-
2
4.1.10 Section 11, Limitations—Discussesthelimitationsof
ings and Building Systems
the payback method.
E1074 PracticeforMeasuringNetBenefitsforInvestments
2
in Buildings and Building Systems
5. Significance and Use
E1185 Guide for Selecting Economic Methods for Evalu-
2
5.1 The payback method is part of a family of economic
ating Investments in Buildings and Building Systems
evaluation methods that provide measures of economic perfor-
2.2 ASTM Adjuncts:
3
mance of an investment. Included in this family of evaluation
Discount Factor Tables, Adjunct to Practice E917
methods are life-cycle costing, benefit-to-cost and savings-to-
3. Terminology
investment ratios, net benefits, and internal rates of return.
5.2 The payback method accounts for all monetary values
3.1 Definitions—For definitions of terms used in this
associated with an investment up to the time at which cumu-
practice, refer to Terminology E833.
lative net benefits, discounted to present value, just pay off
4. Summary of Practice
initial investment costs.
5.3 Use the method to find if a project recovers its invest-
4.1 This practice is organized as follows:
ment cost and other accrued costs within its service life or
4.1.1 Section 2, Referenced Documents—ListsASTM stan-
within a specified maximum acceptable payback period
dards and adjuncts referenced in this practice.
(MAPP)lessthanitsservicelife.Itisimportanttonotethatthe
4.1.2 Section 3, Definitions—Addresses definitions of terms
decision to use the payback method should be made with care.
used in this practice.
(See Section 11 on Limitations.)
4.1.3 Section 4, Summary of Practice—Outlines the con-
tents of the practice.
6. Procedures
6.1 Therecommendedstepsformakinganeconomicevalu-
ation of buildings or building components are summarized as
1
This practice is under the jurisdiction of ASTM Committee E06 on Perfor-
follows:
mance of Buildings and is the direct responsibility of Subcommittee E06.81 on
Building Economics.
6.1.1 Identify objectives, alternatives, and constraints,
Current edition approved Oct. 10, 2002. Published November 2002. Originally
6.1.2 Select an economic evaluation method,
published as E1121–86. Last previous edition E1121–98.
2
6.1.3 Compile data and establish assumptions,
Annual Book of ASTM Standards, Vol 04.11.
3
Available from ASTM Headquarters. Order ADJE091703. 6.1.4 Convert cash flows to a common time basis, and
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
1

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E1121–02
6.1.5 Compute the economic measure and compare alterna-
where:
tives.
B = dollar value of benefits (including earnings,
t
6.2 Only the step in 6.1.5, as applied to measuring payback,
cost reductions or savings, and resale values,
is examined in detail in this practice. For elaboration on the
if any, and adjusted for any tax effects) in
steps in 6.1.1-6.1.4, consult Practices E964 and E917, and period t for the building or system being
Guide E1185.
evaluated less the counterpart benefits in pe-
riod t for the mutually exclusive alternative
7. O
...