A company is deciding whether to purchase hybrid cars for its salespeople or gasoline-engine cars.Which of the following costs would NOT be relevant to its decision?

Question

Quizplus · Accepted Answer

The book value of the current fleet of sales vehicles is not relevant to the decision of whether to purchase hybrid or gasoline-engine cars for the salespeople. It is a sunk cost and cannot be recovered regardless of the decision made. The relevant costs are the purchase price of each type of car and the cost per gallon of gasoline for the gasoline-engine car.

A Company Is Deciding Whether to Purchase Hybrid Cars for Its