White Water Tours is considering the purchase of a new tour boat. They are faced with choosing between the Wave Runner and the Split Hull models. The boats are comparable on performance and both meet the company's needs equally. Both boats have an expected useful life of five years at which time they will be sold. The following information has been gathered to assist in making the purchase decision:

Required:
A. Which if any of the listed costs above are not relevant to your decision?
B. What are the total relevant costs of purchasing the Wave Runner?
C. What are the total relevant costs of purchasing the Split Hulla?
D. What is the differential cost involved in your decision?

Question

White Water Tours is considering the purchase of a new tour boat. They are faced with choosing between the Wave Runner and the Split Hull models. The boats are comparable on performance and both meet the company's needs equally. Both boats have an expected useful life of five years at which time they will be sold. The following information has been gathered to assist in making the purchase decision:
  
Required:
A. Which if any of the listed costs above are not relevant to your decision?
B. What are the total relevant costs of purchasing the Wave Runner?
C. What are the total relevant costs of purchasing the Split Hulla?
D. What is the differential cost involved in your decision?

Quizplus · Accepted Answer

The Answer of White Water Tours is considering the purchase of a new tour boat. They are faced with choosing between the Wave Runner and the Split Hull models. The boats are comparable on performance and both meet the company's needs equally. Both boats have an expected useful life of five years at which time they will be sold. The following information has been gathered to assist in making the purchase decision:
  
Required:
A. Which if any of the listed costs above are not relevant to your decision?
B. What are the total relevant costs of purchasing the Wave Runner?
C. What are the total relevant costs of purchasing the Split Hulla?
D. What is the differential cost involved in your decision?

White Water Tours Is Considering the Purchase of a New