\subsection{Lifecycle Cost Planning and Time Value Money (TVM) Analysis}
\begin{center}
\textbf{Updated Cash Flow Diagram for Control-Based Station (5-Year Lifecycle)}
\end{center}
\begin{tikzpicture}[>=Stealth, scale=1, every node/.style={scale=1}]
% Draw timeline
\draw[->] (0,0) -- (6.5,0) node[right] {Time (Years)};
\foreach \x in {0,1,2,3,4,5} {
\draw (\x,0.1) -- (\x,-0.1) node[below] {\x};
}
% Year 0 - Initial Investment
\draw[->, thick] (0,0) -- (0,-2.65) node[below] {- \$530};
% Years 1–4 - Annual Operating Cost
\foreach \x in {1,2,3,4} {
\draw[->, thick] (\x,0) -- (\x,-1.2) node[below] at (\x,-1.4) {- \$120};
}
% Year 5 - Annual Cost + Salvage
\draw[->, thick] (5,0) -- (5,-1.2) node[below left] {- \$120};
\draw[->, thick, green!60!black] (5,0) -- (5,2) node[above] {+ \$200};
% Labels
\node at (3,-4.2) {Cash Outflows = CAPEX \& OPEX};
\node at (5.8,2.4) {Salvage Value};
\end{tikzpicture}
\par \textbf{Cost Constrain:} The system is designed with strict cost constraints to ensure affordability for small-scale farmers and homesteaders. The goal is to maintain an annual operating cost below \$200 and a one-time hardware cost under \$1000, as specified in REQ-20 and REQ-26. The cost model incorporates hardware components, connectivity fees, and maintenance buffers.
\begin{table}[H]
\centering
\caption{Estimated First-Year and Annual Operating Costs for Current System}
\begin{tabular}{|l|l|l|}
\hline
\textbf{Category} & \textbf{One-Time Cost (USD)} & \textbf{Annual Cost (USD)} \\
\hline
Edge Device (Raspberry Pi 4 + Peripherals) & \$100 & -- \\
Sensors (Weather Station + Soil Moisture Sensor) & \$200 & -- \\
4G Modem + SIM Hardware & \$50 & -- \\
Solar Power Kit + Battery Storage & \$150 & -- \\
Weatherproof Enclosure & \$30 & -- \\
Data Connectivity (4G SIM, low-data) & -- & \$6--\$12 \\
Preventive Maintenance Buffer & -- & \$50 \\
Cloud/Remote Logging (Optional) & -- & \$60 \\
\hline
\textbf{Total Estimate} & \textbf{\$530} & \textbf{\$116--\$122} \\
\hline
\end{tabular}
\end{table}
\noindent
The model assumes one centralized edge device performing both hub and compute functions. This reduces recurring data costs by minimizing transmission frequency and eliminates the need for cloud-hosted control services. The architecture supports expansion through additional sensors without significantly increasing operating costs.
Performing Trade-off study for not using alternatives as mentioned in House of Quality (figure \ref{fig:hoq})
\begin{table}[H]
\centering
\caption{10-Year Cost Comparison: Control-Based vs. Azure IoT System}
\begin{tabular}{|p{0.3\textwidth}|l|l|}
\hline
\textbf{Item} & \textbf{Control-Based System (USD)} & \textbf{Azure IoT System (USD)} \\
\hline
Initial Hardware Cost & \$530 & \$300 \\
10-Year Subscription Cost & \$0 & \$1,800 \\
10-Year Operating Cost & \$1,200 & \$1,200 \\
Salvage Value (End of Year 10) & -\$200 & \$0 \\
\hline
\textbf{Total Lifecycle Cost} & \textbf{\$1,530} & \textbf{\$3,300} \\
\hline
\end{tabular}
\label{tab:10year-cost-comparison}
\end{table}
\begin{table}[H]
\centering
\caption{Detailed Annual Operating Cost Estimate}
\renewcommand{\arraystretch}{1.2}
\begin{tabular}{lll}
\hline
Cost Item & Annual Estimate & Notes \\
\hline
Replacement batteries \& parts & \$40 & Rechargeables for sensors, valve batteries \\
Occasional sensor replacement & \$50 & 1–2 sensors/year \\
Manual maintenance time (labor) & \$50–\$70 & Self-service \\
Data storage backup (USB rotation) & \$20 & Flash drives \\
Cloud Services (avoided) & \$0 & Azure IoT Central typically charges \$5–10 per device/month ⇒ saved \$60–\$120/year \\
Total Annual Cost & \textasciitilde{}\$160 & Under target \$ 200\\
\hline
\end{tabular}
\end{table}
\begin{table}[H]
\centering
\caption{Financial Model Input Parameters}
\renewcommand{\arraystretch}{1.2}
\begin{tabular}{lr}
\hline
Category & Value \\
\hline
Initial Cost (B) & 625 \\
Annual Income (Benefit) & 180000 \\
Annual Operating Cost & 160 \\
Net Annual Cash Flow & 179840 \\
Discount Rate (MARR) & 0.12 \\
\hline
\end{tabular}
\end{table}
\newpage
\begin{landscape}
\begin{table}[H]
\centering
\caption{6-Year Financial Model with MACRS 5-Year Depreciation (Landscape)}
\resizebox{\linewidth}{!}{%
\begin{tabular}{rrrrrrrr}
\hline
Year & BTCF & MACRS Dep Rate & MACRS Dep Deduction & Book Value & Taxable Income & Income Taxes & ATCF \\
\hline
0 & -625 & 0 & 0 & 625 & -125 & 0 & -625 \\
1 & 179840 & 0.20 & 125 & 500 & -200 & 0 & 179840 \\
2 & 179840 & 0.32 & 200 & 300 & -120 & 0 & 179840 \\
3 & 179840 & 0.192 & 120 & 180 & -72 & 0 & 179840 \\
4 & 179840 & 0.1152 & 72 & 108 & -72 & 0 & 179840 \\
5 & 179840 & 0.1152 & 72 & 36 & -36 & 0 & 179840 \\
6 & 179840 & 0.0576 & 36 & 0 & 0 & 0 & 179840 \\
\hline
\end{tabular}%
}
\end{table}
\begin{table}[H]
\centering
\caption{NPV and IRR Computation for 6-Year Financial Model}
\renewcommand{\arraystretch}{1.2}
\begin{tabular}{ll}
\hline
Metric & Value \\
\hline
Initial Investment (Year 0) & \(-\$625\) \\
Net Annual Cash Flow (Years 1–6) & \$179,840 \\
Discount Rate (MARR) & 12\% \\
Net Present Value (NPV) & \$851,222.79 \\
Internal Rate of Return (IRR) & 2882.7\% \\
\hline
\end{tabular}
\end{table}
\end{landscape}