Engineering economics — identifying “first cost” correctly Pick the correct statement(s) about first cost in project evaluation (consider the initial capital required to start the project, and typical examples like purchasing a car).

Introduction / Context:
In engineering economics and project management, understanding the timing and nature of cash flows is essential. One of the most fundamental concepts is the idea of the first cost, also called the initial investment or initial outlay. Getting this definition right is the starting point for accurate net present worth, internal rate of return, payback, and life-cycle cost analyses.

Given Data / Assumptions:

• We are classifying statements that describe first cost.
• Cash flows are considered on a project time axis with time zero at the project start.
• Realistic examples (such as buying a car) illustrate what constitutes first cost.

Concept / Approach:
First cost is the amount of money that must be committed at the beginning of a project to acquire assets and enable the work to start. It can be a lump sum (one-time) or a short series of closely timed payments at inception. In consumer examples, it includes all necessary amounts paid to take possession and put the asset into service, not just the advertised base price.

Step-by-Step Solution:
Identify the timing: first cost occurs at or near time zero (project start).Classify typical items: purchase price, taxes, duties, dealer's fees, registration, and installation costs are part of first cost.Recognize that first cost may be one payment or a short series of startup payments.Match to options: each option reflects a correct interpretation of first cost, so the comprehensive answer is “All of these”.

Verification / Alternative check:
Life-cycle cost breakdowns typically show first cost at time zero; operating, maintenance, and salvage occur later. Any payment necessary to place the asset into service at the start belongs to first cost.

Why Other Options Are Wrong:
“None of these” is incorrect because each listed statement correctly describes some aspect of first cost.

Common Pitfalls:

• Omitting mandatory upfront charges (taxes, fees, installation) from first cost, which underestimates the initial outlay.
• Confusing down payment (first cost) with periodic installments (future cash flows).

Final Answer:
All of these