When Using Life-Cycle Costing as One of the Criteria for Evaluating

question 99

Multiple Choice

When using life-cycle costing as one of the criteria for evaluating and selecting a supplier for a new oil well drilling platform,a purchasing agent should look at:

• A) the initial cost of the platform.
• B) the estimated maintenance cost for the platform over a ten-year period.
• C) how soon the platform will need to be replaced.
• D) the cost of installing the platform at a drilling site.
• E) all of the above

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Definitions:

Matching Principle

An accounting principle that recognizes expenses in the same period as the revenues they are related to are earned.