The correct answer is A. Carpet $120,000 . This question applies life-cycle cost comparison , which is commonly used in the Development Phase when VM alternatives are being analyzed for economic feasibility and owner value. The better value option is not determined by the lowest initial cost alone; it must include installed cost, maintenance cost, recurring service cost, and service life impacts.
For carpet:
Installed cost = 1,000 sq. m × $30 = $30,000 .
Vacuum maintenance = $500/month × 12 months × 10 years = $60,000 .
Annual shampoo = $3,000/year × 10 years = $30,000 .
Total carpet life-cycle cost = $30,000 + $60,000 + $30,000 = $120,000 .
For vinyl over a comparable 10-year ownership period:
Installed cost = 1,000 sq. m × $10 = $10,000 .
Vacuum maintenance = $400/month × 12 × 10 = $48,000 .
Strip and wax = $1,000/month × 12 × 10 = $120,000 .
Total vinyl cost = $178,000 .
Although vinyl has a lower initial cost, its recurring monthly strip-and-wax cost makes it more expensive. Therefore, carpet provides the better value.
References/topics: Development Phase; Life-Cycle Costing; Economic Evaluation; Alternative Comparison; Owner Value.
