Answer the following question(s)using the information below.Jim's 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it road worthy again.His friend, Julie, suggested that he should buy a 5-year-old used Honda Civic instead for $3,000 cash.Julie estimated the following costs for the two cars:

-The cost NOT relevant for this decision is the
A)acquisition cost of the Geo Prizm.
B)acquisition cost of the Honda Civic.
C)repairs to the Geo Prizm.
D)annual operating costs of the Honda Civic.
E)annual operating costs of the Geo Prizm.

Question

Answer the following question(s)using the information below.Jim's 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it road worthy again.His friend, Julie, suggested that he should buy a 5-year-old used Honda Civic instead for $3,000 cash.Julie estimated the following costs for the two cars:
 
-The cost NOT relevant for this decision is the
A)acquisition cost of the Geo Prizm. 
B)acquisition cost of the Honda Civic. 
C)repairs to the Geo Prizm. 
D)annual operating costs of the Honda Civic. 
E)annual operating costs of the Geo Prizm.

Quizplus · Accepted Answer

The acquisition cost of the Geo Prizm is a sunk cost and does not affect the decision about future actions.

Answer the Following Question(s)using the Information Below