How is the capitalized cost of any structure or property computed?

The proper computation of the capitalized cost of any structure or property involves considering all costs that will be incurred over the life of the asset, which includes the first cost and the ongoing maintenance required to keep the property in usable condition.

Capitalized cost is a method used to assess the total necessary investment for an asset, and it must reflect all future costs that will impact its value. Therefore, in the context of option C, the capitalized cost includes not just the initial expenditure (the first cost) but also the cost of perpetual maintenance, ensuring that the asset remains functional and retains its value over time.

This perspective is essential, especially in fields like engineering economics, where long-term profitability and asset management are crucial. The maintenance costs reflect ongoing commitments that must be accounted for in the overall economic evaluation of the property. Options that only consider the first cost or indirect costs do not provide a complete picture of the total economic burden associated with owning and operating an asset.