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The Institute of Asset Management IAM-Certificate Exam - Topic 1 Question 10 Discussion

The costs included in an outline business case for the purchase of new assets should include:
E) All known and estimated costs for the asset lifecycle
A) Only costs that are known and therefore accurate
B) All costs for the design and creation phase of the asset
C) All costs quoted by potential suppliers excluding operation and maintenance costs
D) All costs, including estimated asset disposal costs but excluding design costs

The Institute of Asset Management IAM-Certificate Exam - Topic 1 Question 10 Discussion

Actual exam question for The Institute of Asset Management's IAM-Certificate exam
Question #: 10
Topic #: 1
[All IAM-Certificate Questions]

The costs included in an outline business case for the purchase of new assets should include:

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Suggested Answer: E

The correct answer isE. IAM'sAnatomy of Asset Management Version 4explicitly places emphasis onwhole-life / whole-costdecision-making, includinglife cycle cost analysis, disposal, renewal, rationalisation, and other lifecycle considerations. For an outline business case, that means the cost base should include not only purchase or creation costs, but also known and estimated costs across thefull asset lifecycle.

That is why the alternatives are weaker. Limiting costs only to what is already known, only to design and creation, or only to supplier quotations would ignore IAM's lifecycle-value approach. Excluding design costs is also wrong, because lifecycle costing starts before operation and extends through end-of-life.


by Rolf at May 26, 2026, 08:33 AM

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Justine
12 hours ago
B makes sense for initial phases, but what about later costs?
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Gianna
6 days ago
A is too limiting, we need a broader view.
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Jaclyn
11 days ago
Wait, why would we exclude design costs? That seems off.
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Ryann
16 days ago
Totally agree with E! Can't overlook lifecycle costs.
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Dulce
21 days ago
E is the most comprehensive option.
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Delbert
26 days ago
I recall a similar question where we had to consider lifecycle costs, so E might be the best choice here too.
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Yong
1 month ago
I feel like option A is too limiting since we often have to estimate costs for budgeting purposes.
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Janey
1 month ago
I'm not sure about the design costs; I remember a practice question where they were included in the total costs.
upvoted 0 times
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Brittni
1 month ago
I think option E sounds right because it mentions both known and estimated costs, which seems comprehensive.
upvoted 0 times
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