Life cycle cost assessments help compare options based on the total cost of ownership over the life.

• A. Only initial cost matters
• B. True
• C. Not relevant
• D. Only disposal costs matter

Answer: (B)

Life cycle cost assessments focus on the total cost of ownership over an asset’s life, not just the upfront price. They add up initial purchase or implementation costs, installation, ongoing operating costs (like energy use), maintenance and repairs, potential replacements, financing, and end-of-life disposal. This approach lets you compare options that may have different upfront costs but lead to different total expenses over time. For example, a more expensive, energy-efficient choice can save more in energy bills and maintenance, making it cheaper overall than a cheaper, less efficient option. Since the total cost over the life matters, the statement is true. Choosing only initial costs or only disposal costs misses the large ongoing and future costs that drive the real value.