A buyer may try to estimate the life-cycle cost of purchasing a product. Life-cycle cost is defined as the
A) product's purchase cost plus any salvage value.
B) product's purchase cost plus discounted cost of maintenance and repair less any salvage value.
C) product's purchase cost plus discounted cost of maintenance and repair plus any salvage value.
D) product's purchase cost plus discounted cost of maintenance and repair.
E) product's purchase cost plus the total cost of maintenance and repair less any salvage value.

Question

Quizplus · Accepted Answer

Life-cycle cost includes the initial purchase cost, the discounted costs of maintenance and repair over the product's life, and subtracts any salvage value the product may have at the end of its life. This approach provides a more comprehensive understanding of the total cost of owning and operating a product over its entire lifespan.

A Buyer May Try to Estimate the Life-Cycle Cost of Purchasing