There are two types of monetary costs involved in the purchase of any product: transactional costs and life-cycle costs. Which of the following best exemplifies a life-cycle cost in the purchase of an automobile?
A) the actual purchase price
B) state or local taxes
C) anticipated repair expenses
D) registration fees
E) title fees

Question

Quizplus · Accepted Answer

Life-cycle costs include all costs associated with the ownership of a product over its entire life, including maintenance and operational costs. Anticipated repair expenses for an automobile are a prime example of life-cycle costs, as they occur over the period of ownership beyond the initial purchase.

There Are Two Types of Monetary Costs Involved in the Purchase