ASTM E1121-07e1

This document is not anASTM standard and is intended only to provide the user of anASTM 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:E 1121–02
´1
Standard Practice for Designation:E1121–07
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
´ NOTE—Section 2.2 was editorially corrected in January 2009.
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
2
E964 Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems
E1057Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and
2
Building Systems Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building
Systems
E1057 Practice for Measuring Internal Rate of Return andAdjusted 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
2
E1185 Guide for Selecting Economic Methods for Evaluating Investments in Buildings and Building Systems
2.2 ASTM Adjuncts:
Discount Factor Tables, Adjunct to Practice E917Guide for Selecting Economic Methods for Evaluating Investments in
Buildings and Building Systems
2.2 Adjuncts:
3
Discount FactorTables Adjunct to Practices E917, E964, E1057, E1074, and E1121
3. Terminology
3.1 Definitions—For definitions of terms used in this practice, refer to Terminology E833Terminologies E631 and 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.
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 Oct. 10, 2002. Published November 2002. Originally published as E1121–86. Last previous edition E1121–98.
Current edition approved April 1, 2007. Published April 2007. Originally approved in 1986. Last previous edition approved in 2002 as E1121–02.
2
Annual Book of ASTM Standards, Vol 04.11.
2
ForreferencedASTMstandards,visittheASTMwebsite,www.astm.org,orcontactASTMCustomerServiceatservice@astm.org.For Annual Book ofASTM Standards
volume information, refer to the standard’s Document Summary page on the ASTM website.
3
Available from ASTM International Headquarters. Order No. ADJE091703.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
1

---------------------- Page: 1 ----------------------
´1
E1121–07
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.
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 Thepaybackmethodaccountsforallmonetaryvaluesassociatedwithaninvestmentuptothetimeatwhichcumulativenet
benefits,
...

This document is not anASTM standard and is intended only to provide the user of anASTM 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:E 1121–07
´1
Standard Practice for Designation:E1121–07
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
´ NOTE—Section 2.2 was editorially corrected in January 2009.
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
E1057Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and
Building Systems
E1057 Practice for Measuring Internal Rate of Return andAdjusted 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
2.2 ASTM Adjuncts:
Discount Factor Tables,Adjunct to Practice E917Adjuncts:
3
Discount FactorTables Adjunct to Practices E917, E964, E1057, E1074, and E1121
3. Terminology
3.1 Definitions—For definitions of terms used in this practice, refer to Terminologies E631 and 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.
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, 2007. Published April 2007. Originally approved in 1986. Last previous edition approved in 2002 as E1121–02.
2
ForreferencedASTMstandards,visittheASTMwebsite,www.astm.org,orcontactASTMCustomerServiceatservice@astm.org.For Annual Book ofASTM 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 ----------------------
´1
E1121–07
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.
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 Thepaybackmethodaccountsforallmonetaryvaluesassociatedwithaninvestmentuptothetimeatwhichcumulativenet
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 Limitation
...