What is life-cycle cost analysis and why is it important?

• A. Analyzes only initial capital expenditure during project start.
• B. Focuses on revenue projections for future projects.
• C. Evaluates staff performance over the project life.
• D. Assesses total cost of ownership from design through operation and disposal to inform decisions.

Answer: (A)

Life-cycle cost analysis looks at all costs tied to a project over its entire life—from initial design and acquisition through operation, maintenance, and eventual disposal. This broad view helps decision-makers compare options based on total cost of ownership, not just the upfront price. By including ongoing costs like energy use, maintenance, replacements, and end-of-life costs, it reveals which choices deliver the best long-term value and financial predictability. The description that fits this idea is the one that explains assessing total cost of ownership from design through operation and disposal to inform decisions. The other statements focus only on initial outlays, revenue projections, or staff performance, which don’t capture the full lifetime cost perspective.