The book value of old equipment is not a relevant cost in a decision.

Name: The book value of old equipment is not a relevant cost in a decision.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The book value of old equipment is a sunk cost and therefore not relevant in decision making. The relevant costs are the present or future costs and benefits associated with the decision, such as the cost of replacing the old equipment or the potential savings from using new equipment.

The Book Value of Old Equipment Is Not a Relevant