Certified Facility Manager (CFM) Practice Exam

Question: 1 / 400

What is a life cycle cost analysis?

A method for determining real-time asset value

A calculation of future asset appreciation

A method used to assess the total cost of ownership over the life of an asset

Life cycle cost analysis is a comprehensive method employed to assess the total cost associated with owning and operating an asset over its entire lifespan. This approach encompasses not just the initial purchase price but also includes costs related to operation, maintenance, and eventual disposal or decommissioning of the asset. By evaluating these factors in conjunction with one another, facility managers can make more informed decisions regarding investments, ensuring that they consider the long-term financial implications rather than just front-loaded expenditures.

In this context, understanding the total cost of ownership is crucial for effective facility management, allowing professionals to explore options that may be more cost-effective over the long run, even if they are more expensive upfront.

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