The term "annual cost" refers to the total amount of money that is required to be spent or invested in a particular activity, project or asset over the course of one year. This includes all expenses related to the maintenance, operation and upkeep of the item or service being considered. It can also include costs associated with any necessary repairs, improvements, insurance premiums, taxes, fees, salaries, supplies, utilities, and other ongoing expenditures that are required for its proper functioning. The annual cost is typically calculated by adding up all of the anticipated expenses over a 12-month period and then dividing that total by the number of months in the year to arrive at an average monthly cost. This information can be useful when budgeting, planning or making decisions about whether or not to proceed with a particular investment, as it provides insight into what the ongoing financial obligations will be over time.