Question

What three main categories of costs are considered in figuring out the total cost of ownership?

Short answer

Acquisition costs, ownership costs, and post-ownership costs.

Step-by-step solution

Acquisition cost

After adjusting for discounts, incentives, closing fees, and other necessary expenditures, but before sales taxes,an acquisitioncost, also known as the cost of acquisition, is the overall cost that a corporation recognizes on its books for property or equipment.

Ownership costs

Thecost of ownershipis the total of all costs associated with the acquisition, operation, and maintenance of an asset over its lifetime. It's a financial study that lays out all of the current and future costs of acquiring the asset.

The cost of ownership (TCO) comprises the asset's purchase price as well as running expenditures during its lifetime.

The cost of ownership is a method of determining a purchase's long-term value to a company or individual.

Post ownership cost

All expenditures incurred by the company after the finished product has reached the end client are referred to as post-ownership costs. Warranty expenses, environmental costs, product liability costs, and reputational costs are all included in these costs.