What should be excluded from the calculation of TCO?

The correct choice regarding what should be excluded from the calculation of Total Cost of Ownership (TCO) is depreciation costs. In TCO analysis, the focus is on the out-of-pocket costs incurred for owning and operating an asset over its lifetime. Depreciation is an accounting method used to allocate the cost of an asset over its useful life, reflecting a non-cash expense that does not involve an actual cash outflow.

Excluding depreciation from TCO allows for a clearer understanding of the real costs incurred, such as initial purchase price, future repairs, initial training costs, and variable operating costs. These elements entail tangible cash flows associated with the ownership and operation of the asset, which provide a more accurate picture of the economic impact on the organization.

In contrast, understanding the concepts related to future repairs, initial training costs, and variable operating costs is crucial to TCO calculations, as they represent real monetary expenditures that an organization will face once acquiring the asset.