Question

The Quismo Company is considering building an addition onto its office complex to handle additional computer equipment. Identify which of the following information requirements is least relevant to this decision.

		A.The square footage required for the new computer and accessories
		B.The depreciation expense of the building now housing the current computer
		C.Future demands on usage of the proposed new computer
		D.Cost of the building addition
		E.Impact of the new computer on the company's business processes

Answer 1

Ans. B The depreciation expenses of the building now housing the current computer is least relevant to the decision of building an addition onto its office complex.It is kind of sunk cost that is irrelevant for decision making.

whereas, the square footage required for building addition, cost of building addtion, Future demand on usage of the proposed new computer and impact of the new computer on the company's business process are most releveant factor for cost-benefit analysis to determine whether to proceed with decision on not.