Final answer:
The total cost of ownership includes original costs and operation expenses, being essential to assess the all-encompassing expenses over an asset's life cycle.
Step-by-step explanation:
The total cost of ownership encompasses all costs associated with acquiring and using an asset throughout its entire lifecycle. The most apparent components include the original costs, which cover the asset's purchase price, and the operation expense, reflecting ongoing costs such as maintenance, fuel, repairs, and any related services needed to keep the asset operational. While the depreciation expense and delivery cost are relevant expenditures linked to an asset, they are more appropriately classified as accounting and logistical costs, respectively. Moreover, delivery cost is often a one-time expense, whereas operation expense is recurring and can significantly contribute to the total cost of ownership over time.
When considering an organization's large investments like industrial machinery or a vehicle fleet, meticulously accounting for these costs ensures financial transparency and aids in making more informed economic decisions. Therefore, both original costs and operation expenses should be factored into the total cost of ownership estimates.