CONCEPTUAL FRAMEWORK OF THE ANALYSIS OF LIFE CYCLE COSTS OF REAL ESTATE, INVESTMENTS IN URBAN BUILDING AND HOUSEHOLD ASSETS CONSIDERING THE IMPACT OF INFLATIONARY PROCESSES

Minimization of the cost of the entire life cycle of the property as a criterion for making decisions on the economic feasibility of the acquisition or construction of urban economic facilities, investment in these facilities in comparison with other objects of the same functional utility is now a requirement in most regulations in Ukraine. However, the practical implementation of these requirements as well as the requirements for investment efficiency faces problems of methodological support for life cycle cost analysis from the perspective of uncertainty of these costs in the future and the need to account for the cost of money over time. Besides, inflationary processes have a significant influence on the cost of money in modern Ukraine (in particular, inflation for the last year 2022 was more than 25% per annum). The solution to this problem is the application of valuation procedures proposed in this paper based on discounted cash flows, with a scientifically justified inflation premium in the discount rate. To solve the problem of uncertainty of future costs and taking into account the inherent risk in their forecasting, the methods of sensitivity analysis to changes in the market situation and a reasonable model for assessing the risks associated with inflationary processes proposed in this paper can be used.