Assume you are the owner of a local coffee shop. Last year the shop purchased an espresso machine for \($5,000.\) A sales representative recently showed you a newer machine costing \($7,000\) that produces better espresso much more quickly. Because customer wait time has always been a concern, and the shop is known for its high-quality products, you are seriously considering upgrading to the new machine. The old machine can be sold for $3,000.

Required

a. Explain why the cost of the old machine is not relevant to this decision.

b. Is the current value of the old machine on the open market relevant to this decision? Explain.