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 $20,000 cost of the new machine represents 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 $20,000 cost of the new machine represents a(n)

Quizplus · Accepted Answer

The $20,000 cost of the new machine is a future relevant cost because it represents a cost that would be incurred if Atlanta Motors decides to purchase the new machine, and would have an impact on future cash flows. Therefore, Atlanta Motors should consider this cost when making its decision.

Atlanta Motors Atlanta Motors Is Trying to Decide Whether It