When a company is considering discontinuing production of a product, the original amount paid for the production machinery would usually be relevant to the decision.

Name: When a company is considering discontinuing production of a product, the original amount paid for the production machinery would usually be relevant to the decision.
Brand: Quizplus
Rating: 4.9 (54 reviews)

Question

Quizplus · Accepted Answer

The original amount paid for the production machinery is a sunk cost, which is not relevant to future decision-making since it cannot be recovered or changed.

When a Company Is Considering Discontinuing Production of a Product