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The manager of a computer company once commented: “Not all future costs are relevant to business...

The manager of a computer company once commented: “Not all future costs are relevant to business decisions, but costs are not relevant unless they occur in the future. Is the manager correct? Why or why not? Explain. Provide an example of a make-buy decision or special order decision from your own personal or professional life. What factors did you take into consideration when determining the best decision? Did you rely solely on quantitative factors? Why or why not?

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The manager would probably like to know before deciding whether or not to accept the bid. The current market value would be highly rel-evant to the final decision, but it might not be very reliable because the machine is unique and there is likely to be little information concerning market values.

Where a choice has to be made between providing information that has either more

relevance or more reliability, the maximisation of relevance tends to be the guiding rule.

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