Answer the following question(s)using the information below.John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $6,000 to make it roadworthy again.His wife, Sherry, suggested that he should buy a 5-year-old used Jeep Grand Cherokee instead for $6,000 cash.Sherry estimated the following costs for the two cars:

-The cost NOT relevant for this decision is the
A)acquisition cost of the Trail Blazer.
B)acquisition cost of the Grand Cherokee.
C)repairs to the Trail Blazer.
D)annual operating costs of the Grand Cherokee.
E)annual operating costs of the Trail Blazer.

Question

Answer the following question(s)using the information below.John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $6,000 to make it roadworthy again.His wife, Sherry, suggested that he should buy a 5-year-old used Jeep Grand Cherokee instead for $6,000 cash.Sherry estimated the following costs for the two cars:
 
-The cost NOT relevant for this decision is the
A)acquisition cost of the Trail Blazer. 
B)acquisition cost of the Grand Cherokee. 
C)repairs to the Trail Blazer. 
D)annual operating costs of the Grand Cherokee. 
E)annual operating costs of the Trail Blazer.

Quizplus · Accepted Answer

The acquisition cost of the Trail Blazer is a sunk cost and does not affect the decision-making process for future actions.

Answer the Following Question(s)using the Information Below