The City of Miami is about to replace an old fire truck with a new vehicle in an effort to save maintenance and other operating costs. Which of the following items, all related to the transaction, would not be considered in the decision?

Question

Quizplus · Accepted Answer

The purchase price of the old vehicle would not be considered in the decision, as it is a sunk cost and cannot be recovered. The focus would be on the purchase price of the new vehicle, the savings in operating costs, the proceeds from disposal of the old vehicle, and future depreciation on the new vehicle, as those items are relevant to the decision-making process.

The City of Miami Is About to Replace an Old