The cost NOT relevant for this decision is(are)

ACCOUNTING

Multiple Choice

Jim’s 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it roadworthy again. His friend, Julie, suggested that he should buy a 5-year-old used Honda Civic instead for $3,000 cash. Julie estimated the following costs for the two cars:



Geo Prizm Honda Civic

Acquisition cost $15,000 $3,000

Repairs $ 3,000 ---

Annual operating costs

(Gas, maintenance, insurance) $ 2,280 $2,100



The cost NOT relevant for this decision is(are)

a. the acquisition cost of the Geo Prizm.

b. the acquisition cost of the Honda Civic.

c. the repairs to the Geo Prizm.

d. the annual operating costs of the Honda Civic.


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