Caring Nature – Decision Support System
Assumptions
LCC methodology for application in the healthcare sector
Task 3.2 - Life cycle multidimensional assessment model for HCPs (only the part of LCC)
Assumptions
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Estimated effective life of the equipment item or system
Indexation factors
Cost escalation (CPI)
Revenue escalation
Salary escalation
Discount rate
Nominal discount rate (ten-year rate)
Escalation factors
1
2
3
4
5
6
7
8
9
10
Cost
1.000
1.025
1.051
1.077
1.104
1.131
1.160
1.189
1.218
1.249
Revenue
1.000
1.025
1.051
1.077
1.104
1.131
1.160
1.189
1.218
1.249
Salary
1.000
1.030
1.061
1.093
1.126
1.159
1.194
1.230
1.267
1.305
Discount rate (nominal)
1.000
1.062
1.128
1.198
1.272
1.351
1.435
1.524
1.618
1.718
Present value factor (nominal)
1.000
0.942
0.887
0.835
0.786
0.740
0.697
0.656
0.618
0.582
Discount rate
The discount rate used to calculate the present value of each option is based on the nominal risk free rate.
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