Discuss The Institute Of Asset Management IAM-Certificate Exam Topic 1 Question 10

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

AOnly costs that are known and therefore accurate

BAll costs for the design and creation phase of the asset

CAll costs quoted by potential suppliers excluding operation and maintenance costs

DAll costs, including estimated asset disposal costs but excluding design costs

EAll known and estimated costs for the asset lifecycle

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.

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17 comments · newest first

Sheridan 2 months ago

E is comprehensive. Can't overlook estimated costs.

Stephaine 2 months ago

D seems reasonable, but disposal costs matter too.

Rosann 2 months ago

B is narrow. We need a broader view like E.

Elbert 2 months ago

I like B, focusing on design costs is important.

Lindsey 2 months ago

A is too limiting. We need estimates too.

Wilford 3 months ago

But what about A? Known costs are safer to include.

Janet 3 months ago

I agree, E makes sense. Lifecycle costs are crucial.

Paola 3 months ago

I think E is the best choice. Covers everything.

Justine 3 months ago

B makes sense for initial phases, but what about later costs?

Gianna 3 months ago

A is too limiting, we need a broader view.

Jaclyn 3 months ago

Wait, why would we exclude design costs? That seems off.

Ryann 4 months ago

Totally agree with E! Can't overlook lifecycle costs.

Dulce 4 months ago

E is the most comprehensive option.

Delbert 4 months ago

I recall a similar question where we had to consider lifecycle costs, so E might be the best choice here too.

Yong 4 months ago

I feel like option A is too limiting since we often have to estimate costs for budgeting purposes.

Janey 4 months ago

I'm not sure about the design costs; I remember a practice question where they were included in the total costs.

Brittni 4 months ago

I think option E sounds right because it mentions both known and estimated costs, which seems comprehensive.

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