Atlanta Motors Atlanta Motors is trying to decide whether it should keep its existing car washing machine or purchase a new one that has technological advantages (which translate into cost savings) over the existing machine. Information on each machine follows:
Refer to Atlanta Motors. The $4,000 of annual operating costs that are common to both the old and the new machine are an example of a(n)

Question

Atlanta Motors Atlanta Motors is trying to decide whether it should keep its existing car washing machine or purchase a new one that has technological advantages (which translate into cost savings) over the existing machine. Information on each machine follows:
 Refer to Atlanta Motors. The $4,000 of annual operating costs that are common to both the old and the new machine are an example of a(n)

Quizplus · Accepted Answer

The $4,000 of annual operating costs that are common to both machines are irrelevant costs. When deciding whether to keep the existing machine or invest in a new one, only the costs and benefits that differ between the two options should be considered. Therefore, the $4,000 of common operating costs should not factor into the decision-making process.

Atlanta Motors Atlanta Motors Is Trying to Decide Whether It