Depreciation expense on existing factory equipment is generally relevant to a decision of whether to accept or reject a special offer for a company's product

Question

Quizplus · Accepted Answer

Depreciation expense on existing factory equipment is a sunk cost, which means it has already been incurred regardless of future decisions. Therefore, it is not relevant to the decision of accepting or rejecting a special offer for a company's product.

Depreciation Expense on Existing Factory Equipment Is Generally Relevant to a Decision