Define "life-cycle costing" in terms of capital assets.

Life-cycle costing refers to a comprehensive approach in evaluating the total costs associated with a capital asset throughout its entire lifespan. This includes not just the initial acquisition costs, but also all subsequent expenses such as operation, maintenance, financing, and disposal costs. By focusing on the full spectrum of costs over the asset's life, organizations can make more informed decisions that reflect the true financial impact of acquiring and using capital assets. This approach is crucial for effective budgeting and long-term financial planning.

Considering only the initial acquisition costs disregards the ongoing expenses that can add significantly to the overall cost of ownership. Excluding maintenance costs would lead to underestimating the total cost and could affect the asset's performance and sustainability. Additionally, focusing solely on asset disposal costs would provide an incomplete picture, as it fails to account for the operational and maintenance costs incurred during the asset's usage. Thus, the correct definition highlights the importance of a holistic view of costs associated with capital assets.