An insurance office owns a large building. The sixth floor of this building currently houses its entire Human Resources Department. After carrying out a survey to see whether the sixth floor could be rented and for what price, the company must decide whether to split the Human Resources Department between currently unoccupied spaces on several floors and rent out the entire sixth floor or to leave things as they currently are. Which of the following should NOT be considered when deciding whether to rent out the sixth floor?

Question

Quizplus · Accepted Answer

The cost of the research into the feasibility of renting the sixth floor should not be considered when deciding whether to rent out the sixth floor because this cost has already been incurred and cannot be changed. The other options are important considerations in making the decision. The cost of refurbishing the new space will affect the financial viability of moving the Human Resources Department, the amount obtained by renting the sixth floor will provide additional revenue for the company, and the cost involved with a loss of efficiency resulting from the Human Resources Department being split between several spaces will affect the overall productivity of the department.

An Insurance Office Owns a Large Building