Question

When budgeting a project, you should consider additional expenses such as warranties, supplies, add-ons, and upgrades. Which budgeting term refers to this concept?

a. Top-down approach
b. Baseline your project
c. Total cost of ownership
d. Bottom-up approach

Answer 1

The term that refers to considering additional expenses like warranties and supplies when budgeting a project is 'Total cost of ownership'. It encompasses all costs associated with an asset throughout its life.

Step-by-step explanation:

When budgeting a project, consideration of additional expenses such as warranties, supplies, add-ons, and upgrades refers to the concept of Total cost of ownership (c). The Total cost of ownership includes not just the initial purchase price but also the cumulative cost of operating, maintaining, and upgrading the asset over its entire lifespan. Because these aspects have a financial impact, creating and adhering to a budget is crucial to ensure that sufficient funds are available to cover these expenses.