which of the following is irrelevant when deciding to upgrade company’s heating

Question

which of the following is irrelevant when deciding to upgrade company’s heating and air-conditioning system? ACCT 1020 600 -F Test Exam # 11: Chapter 25 This Question: 1 pt 18 of 20 Which of the following is ielevant when deciding to upgrade a company's heating and air conditioning system? O A. the producthvity of the old equipment compared to that of the new equipment O B. the safety of the new equipment compared to the old equipment O C. the purchase price of the old equipment compared to the purchase price of the new equipment D. the energy efficiency of the old equipment versus the energy efficiency of the new equipment ck to select your answ Type here to search Li

Explanation / Answer

Option - C Purchase price of the old equipment compared to the purchase price of new equipment.

In replacement models we look at the salvage value of old equipment as a relevant cash flow in decision making. Purchase price of the old equipment is treated as a sunk cost that does not effect current decesion making.

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