Question

why depreciation of an old equipment irrelevant to decision making

Answer 1

Depreciation to an old equipment is irrelevant in decision making since it is to be treated as a Sunk Cost(IRRELEVANT COST) for decision making.

When we are looking for alternatives to decision making process, we only look at the cost which we will incur and which will affect our cash flows.

However if we have a proposal for which we will require a new asset then depreciation on such asset is Avoidable cost which is being specifically bought for the proposal only. so take that into account.