ITPEC FE Morning October 2021 Question 57
Source exam: ITPEC FE Morning October 2021Topic: IT Service Management
ITPEC FE Morning October 2021 — Question 57 of 80
TCO = purchase price + (total annual costs × number of years).
- •Annual costs:
2,030 + 1,000 + 700 + 270 = 4,000 - •Total operating cost over 5 years:
4,000 × 5 = 20,000 - •TCO:
120,500 + 20,000 = **140,500**
Why not others:
- (a) 28,100 — incorrect partial calculation
- (b) 120,500 — purchase price only, ignores operating costs
- (d) 622,500 — incorrectly multiplies the purchase price by the number of years as well
Key rule: TCO = one-time purchase cost + (recurring annual costs × years). The purchase price is paid once, not annually.
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