Comparing the FCI (Facility Condition Index) to Threshold Funding
This asset is based on a present value of $10,000,000.
All Three graphs are based on the same asset.
2% inflation and 4% interest have been used
FCI at 5%
To achieve the FCI "Good" the asset value is calculated to meet a point in 25 years of 5% of the value of the asset.
The actual deprecated portion of the asset is calculated at $2,914,00 in 25 years.
This Asset is set to meet the point of $2,108,000 in the year 2028.
this maintains 5% of the expired equity as a funding point
When you add up the total cost to manage with the use of the FCI 5% over the 25 years it is:
$6,105,000.
FCI at 10%
To achieve the FCI of "fair to poor" the asset value is calculated to meet a point in 25 years of 10% of the value of the asset.
The actual deprecated portion of the asset is calculated at $2,914,00 in 25 years.
This Asset is set to meet the point of $1,301,000 in the year 2028.
this maintains 10% of the expired equity as a funding point
When you add up the total cost to manage with the use of the FCI at 10% over the 25 years it is:
$5,596,000.
Threshold Funding
To calculate threshold funding an average annual expenditure is calculated and used a base line to set the critical funding years so that they do not fall below.
In the year 2028 there is a fund amount of $534,000.
Threshold funding has no set point to fund to, it is based on the actual events of the asset
When you add up the total cost to manage with the use of the Threshold Funding over the 25 years it totals $4,739,000.
The total costs of utilizing the FCI as "Good" compared to Threshold Funding over 25 years are calculated as follows:
FCI Costs $6,105,000
Threshold Cost $4,739,000
Total Cost Difference $1,366,000
The total costs of utilizing the FCI as "Fair to Poor" compared to Threshold Funding over 25 years are calculated as follows:
FCI Costs $5,596,000
Threshold Cost $4,739,000
Total Cost Difference $857,000