- A
AWS Budgets
Why wrong: AWS Budgets is used to set custom budgets and receive alerts when costs or usage exceed certain thresholds. It does not provide a total cost of ownership comparison between on-premises and AWS environments.
- B
AWS Cost Explorer
Why wrong: AWS Cost Explorer is a tool for visualizing, understanding, and managing AWS costs and usage over time. It does not compare on-premises infrastructure costs with AWS costs.
- C
AWS Total Cost of Ownership (TCO) Calculator
The AWS TCO Calculator is designed to compare the total cost of ownership of an existing on-premises environment with AWS, factoring in hardware, software, labor, facilities, and other costs. It produces a detailed report that helps organizations estimate the cost savings of migrating to AWS.
- D
AWS Trusted Advisor
Why wrong: AWS Trusted Advisor inspects your AWS environment and provides recommendations in five categories, including cost optimization. However, it does not perform a TCO comparison between on-premises and AWS.
Quick Answer
The answer is the AWS Total Cost of Ownership (TCO) Calculator. This tool is correct because it is purpose-built to generate a detailed side-by-side comparison of on-premises versus AWS costs, factoring in hardware, software, labor, and facilities over a user-defined period—exactly what the CFO needs to evaluate the shift from capital expenditure to operational expenditure. On the AWS Certified Cloud Practitioner CLF-C02 exam, this question tests your understanding of cost management tools and the financial benefits of cloud migration; a common trap is confusing the TCO Calculator with the AWS Pricing Calculator, which estimates future AWS costs only, not a direct comparison. Remember that the TCO Calculator is for comparing your current on-premises environment to AWS, while the Pricing Calculator is for estimating new AWS workloads. A simple memory tip: TCO stands for Total Cost of Ownership, and it always compares two environments—think “TCO = Two Cost Options.”
CLF-C02 Billing, Pricing, and Support Practice Question
This CLF-C02 practice question tests your understanding of billing, pricing, and support. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company is evaluating a migration of its on-premises virtualized workloads to AWS. The CFO wants to understand the potential cost savings over a three-year period by shifting from capital expenditure (hardware purchases) to operational expenditure (pay-as-you-go). The team needs a tool that can provide a detailed comparison of the total cost of ownership (TCO) for the current on-premises environment versus running the same workloads on AWS, including hardware, software, labor, and facilities costs. Which AWS tool should the team use?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
AWS Total Cost of Ownership (TCO) Calculator
The AWS Total Cost of Ownership (TCO) Calculator is specifically designed to compare the costs of running workloads on-premises versus on AWS. It allows users to input details about their current on-premises infrastructure—including hardware, software, labor, and facilities—and generates a detailed side-by-side cost comparison over a specified period (e.g., three years). This directly addresses the CFO's need to understand potential savings from shifting from capital expenditure (CapEx) to operational expenditure (OpEx).
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
AWS Budgets
Why it's wrong here
AWS Budgets is used to set custom budgets and receive alerts when costs or usage exceed certain thresholds. It does not provide a total cost of ownership comparison between on-premises and AWS environments.
- ✗
AWS Cost Explorer
Why it's wrong here
AWS Cost Explorer is a tool for visualizing, understanding, and managing AWS costs and usage over time. It does not compare on-premises infrastructure costs with AWS costs.
- ✓
AWS Total Cost of Ownership (TCO) Calculator
Why this is correct
The AWS TCO Calculator is designed to compare the total cost of ownership of an existing on-premises environment with AWS, factoring in hardware, software, labor, facilities, and other costs. It produces a detailed report that helps organizations estimate the cost savings of migrating to AWS.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
AWS Trusted Advisor
Why it's wrong here
AWS Trusted Advisor inspects your AWS environment and provides recommendations in five categories, including cost optimization. However, it does not perform a TCO comparison between on-premises and AWS.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse the TCO Calculator with AWS Cost Explorer, assuming both provide cost comparisons, but Cost Explorer only shows historical AWS spend, not a forward-looking comparison with on-premises costs.
Detailed technical explanation
How to think about this question
The AWS TCO Calculator uses a detailed input model where users specify server types, storage, network, and labor costs, then applies AWS pricing models (e.g., Reserved Instances, Savings Plans) to project costs. It also factors in data center costs like power, cooling, and real estate, which are often hidden in on-premises budgets. A real-world scenario is a company migrating 50 VMware VMs: the TCO Calculator can show that moving to AWS with 3-year Reserved Instances reduces total cost by 40% when including avoided hardware refresh cycles and reduced IT labor.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this CLF-C02 question test?
Billing, Pricing, and Support — This question tests Billing, Pricing, and Support — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: AWS Total Cost of Ownership (TCO) Calculator — The AWS Total Cost of Ownership (TCO) Calculator is specifically designed to compare the costs of running workloads on-premises versus on AWS. It allows users to input details about their current on-premises infrastructure—including hardware, software, labor, and facilities—and generates a detailed side-by-side cost comparison over a specified period (e.g., three years). This directly addresses the CFO's need to understand potential savings from shifting from capital expenditure (CapEx) to operational expenditure (OpEx).
What should I do if I get this CLF-C02 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Same concept, more angles
1 more ways this is tested on CLF-C02
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A company is planning to migrate its on-premises infrastructure to AWS. The operations team wants to compare the total cost of ownership (TCO) between running workloads on-premises and running them on AWS. They need a tool that can accept details about their current on-premises servers (number of servers, CPU, memory, storage) and produce a detailed report comparing costs over a specified period, including savings from avoided hardware purchases, IT labor, and data center costs. Which AWS tool should the operations team use?
medium- A.AWS Cost Explorer
- ✓ B.AWS Total Cost of Ownership (TCO) Calculator
- C.AWS Pricing Calculator
- D.AWS Cost and Usage Report
Why B: The AWS Total Cost of Ownership (TCO) Calculator is specifically designed to compare the costs of running on-premises infrastructure versus AWS. It accepts detailed inputs about existing on-premises servers (such as CPU, memory, and storage) and generates a comprehensive report that includes savings from avoided hardware purchases, IT labor, and data center costs over a user-specified period. This directly matches the operations team's requirement for a detailed TCO comparison.
Last reviewed: Jun 11, 2026
This CLF-C02 practice question is part of Courseiva's free Amazon Web Services certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CLF-C02 exam.
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