Rick is an accountant. His boss has asked him to make a recommendation about buying or leasing new computer equipment for the accounting department. A decision has already been made to acquire a particular type of equipment. The only remaining decision is whether the equipment will be purchased or leased. Several pieces of information Rick might consider in his decision are listed below. Indicate whether each of the following items is:
R relevant or
I irrelevant to the decision.
1 cost of current computer equipment
2 interest rate for lease
3 employee feelings about the type of new computer equipment
4 cost of purchasing new equipment
5 depreciation on old equipment
6 future reliability of new equipment
7 independent quality ratings on new equipment
8 trade-in value of old equipment
9 tax incentives to lease
10 personal relationship with equipment vendor

Question

Quizplus · Accepted Answer

The Answer of Rick is an accountant. His boss has asked him to make a recommendation about buying or leasing new computer equipment for the accounting department. A decision has already been made to acquire a particular type of equipment. The only remaining decision is whether the equipment will be purchased or leased. Several pieces of information Rick might consider in his decision are listed below. Indicate whether each of the following items is:
R relevant or
I irrelevant to the decision.
1 cost of current computer equipment
2 interest rate for lease
3 employee feelings about the type of new computer equipment
4 cost of purchasing new equipment
5 depreciation on old equipment
6 future reliability of new equipment
7 independent quality ratings on new equipment
8 trade-in value of old equipment
9 tax incentives to lease
10 personal relationship with equipment vendor

Rick Is an Accountant