Question

Capitalized cost comparison method is used for comparing alternatives having:

• A. High initial cost
• B. High maintenance cost
• C. High service life
• D. High running cost

Hint:

Use capitalized cost analysis for decisions involving perpetual or very long-term assets.

Answer 1

The Correct Option is C

The capitalized cost method evaluates projects or alternatives that last indefinitely. It is used to determine the long-term cost-effectiveness of alternatives with high service life.