TCO of a $500 Computer Your friend Ron has asked for your help in buying a home

Question

TCO of a $500 Computer Your friend Ron has asked for your help in buying a home computer. He intends to use the computer for word processing, email, entertainment, and Internet access, and he wants your advice about how much he should budget for a home personal computer. He is skeptical of ads for computers that cost less than $500. What is a realistic amount Ron should expect to spend, both at the time of initial purchase and over the next four years of ownership? Use catalogs, articles in online or print computer magazines, and vendor websites to obtain current price information. Design a spreadsheet to draw up a sample budget, showing your recommended initial expenditure and the annual cost for the next four years. Break down the costs by the categories described in this chapter. Show the total cost of ownership over the four years that Ron plans to own the computer.

Explanation / Answer

Ron should keep in mind the total cost he would be going to bear while buying the computers and the total budget his company has for the same.

While buying a computer, the first is the initial cost i.e. the price of the computer

Secondly there would be some installation charges that would have to be given to the technician

Computer also needs maintainance and other software upgradation which are a charges of the future

Apart from there, there is an opportunity costs including while investing the money in the computers as such money could be invested elsewhere to earn returns.

So the probable column in the spreadsheet would be the above mentioned charges

According to the latest data in thr catalogues and ads, a computer can be bought at around $400

Maintenance is $50

Opportunity cost $100

Software upgradation $100

Note- I have self collected these charges and these can differ im different locations

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.