Which of the following is not relevant information in a decision whether old equipment presently being used should be replaced by new equipment?
A) The cash price of the new equipment
B) The salvage value of the old equipment
C) The book value of the old equipment
D) The cost savings if the new equipment is purchased

Question

Quizplus · Accepted Answer

The book value of the old equipment is not relevant because it is a sunk cost and cannot be recovered regardless of the decision to replace the equipment or not. The cash price of the new equipment, the salvage value of the old equipment, and the cost savings if the new equipment is purchased are all relevant factors that should be considered in the decision-making process.

Which of the Following Is Not Relevant Information in a Decision