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TCO is the total cost of owning and using an item, usually IT equipment.  It includes not just the original purchase, delivery and implementation costs but also the expected costs throughout it's life time (power, support, maintenance &c) and the cost of disposal.  This is particularly important where a small extra cost at purchase time may realise a much larger saving over the lifetime of the item or a longer usable lifespan so delaying the replacement cost.

This may include a Net Present Value calculation as, due to inflation, a saving in the future is not worth as much as the same saving now.