- This topic has 3 replies, 3 voices, and was last updated 4 years ago by
.
- Posts
Should we include all the costs when calculating lifecycle costs?
Are there any costs which shouldn’t be included then please tell me?
Yes, all the costs should be included.
Have you watched my free lectures on this?
I want to ask u said that all costs are included but I really wanna know that does that includes initial cost, depreciation, and opportunity cost?
If we have included the initial cost of the machine in lifecycle cost should we also have to include depreciation?
If not then why because depreciation is charged every year until the lifecycle of a project while the initial cost is only included in the first year (when we bought the machine?
So I ask again there are no specific costs that should be not be included?
Depreciation is just an accounting convention. It is not an extra cost because it is just spreading the initial cost. To include it and the initial cost would mean accounting for the initial cost twice.
As to what other costs may or may not be relevant it depends on the wording of the question.
- You must be logged in to reply to this topic.