Terotechnology and Lifecycle Costs

Running head: TEROTECHNOLOGY AND LIFECYCLE COSTS
Terotechnology and Lifecycle Costs
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TEROTECHNOLOGY AND LIFECYCLE COSTS
Table of Contents
Answer to Question No 1................................................................................................................2
Introduction..................................................................................................................................2
Gaps in Life Cycle Costing..........................................................................................................2
Recommendation.........................................................................................................................4
Answer to Question No 2................................................................................................................5
Answer to Question No 3................................................................................................................6
Answer to Question No 4................................................................................................................6
Answer to Question No 5................................................................................................................7
Reference List..................................................................................................................................8

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TEROTECHNOLOGY AND LIFECYCLE COSTS
Answer to Question No 1
Introduction
The main aim of the report is analyse the incorporate the selection process of the projects
undertaken by XYZ Ltd and this company is associated with the manufacturing activities and
processes. The company is looking forward to develop their business and hence are looking for
an investment in a tool or machine with the help of the management can gain several substitutes.
For the purpose of selecting and evaluating the options that can be undertaken by the
management, the management will be utilising the process of capital budgeting that includes the
assessment of the net present value, payback period and the profitability index. This report would
even try to explain any gaps that are present in the Life Cycle Costing Process and thereafter
would make recommendations to the company in accordance to the procedure that can be
undertaken with the help of which the risks can be assessed properly and thereby develop the
cost and benefit analysis of their operations.
Gaps in Life Cycle Costing
This process is known to be a kind of costing that considers the actual expenses and the
earnings, which are related to a product from their first use till the time of expiry of the product.
It is therefore said that life cycle cost technique takes into account the costs associated to the
product at the time of the project life cycle. The entire cost of production of the product
comprises of all the expenditures and these are the costs that are created at the process of
planning, designing, acquisition and related costs that are associated to the product. The life
cycle costing technique explains the actual cost of ownership for the assets and therefore will be
inclusive of all the expenses that would incur within the entire span of the asset. This technique