When faced with a make-or-buy decision,managers need the following information about buying except
A)purchase price of item
B)rent or cash flow to be generated from vacated factory space
C)salvage value of unused machinery
D)depreciation previously charged to machinery to be discarded

Question

Quizplus · Accepted Answer

Depreciation previously charged to machinery to be discarded is not relevant to a make-or-buy decision because it is a sunk cost, which is a cost that has already been incurred and cannot be recovered or changed by any decision made now or in the future.

When Faced with a Make-Or-Buy Decision,managers Need the Following Information