Final answer:
The statement is false; functional obsolescence can incur a penalty greater than the cost to cure. It is related to outdated designs of assets that cannot be easily updated, and differs from planned obsolescence where products are designed to fail to push new sales.
Step-by-step explanation:
The statement that the penalty for functional obsolescence cannot exceed the cost to cure is false. In practice, functional obsolescence can incur a penalty that is greater than the cost to cure, especially in scenarios where curing the obsolescence is not economically feasible. Functional obsolescence refers to the loss of an asset's functionality or usefulness resulting from an outdated design that cannot be easily updated, repaired, or replaced.
Turning our attention to the broader context of obsolescence, planned obsolescence is a business strategy where products are designed to fail after a certain period to encourage consumers to purchase newer models. This is mostly observed in the tech industry, where fixes for older models are often more costly than the price of new replacements, leading to a disposable economy. However, if the paradigm shifts to prioritize repairability, durable goods and items with lifetime warranties or those designed to facilitate upgrades could become more prevalent, thus reducing environmental costs and aligning with sustainable practices.