In a decision regarding whether or not to buy a new truck, the book value of the old truck usually is considered to be:

Question

Quizplus · Accepted Answer

The book value of the old truck is a sunk cost, meaning it is a cost that has already been incurred and cannot be recovered. It is not a relevant cost because it does not affect the decision to buy a new truck - the decision should be based on the current market value of the old truck and the cost of the new truck. It is also not a differential cost because it is not a cost that differs between two alternatives being considered.

In a Decision Regarding Whether or Not to Buy a New