Determine relevant and irrelevant information (Learning Objective 1)

Joe Roberts, production manager for Fabricut, invested in computer-controlled production machinery last year. He purchased the machinery from Advanced Design at a cost of $2 million. A representative from Advanced Design recently contacted Joe because the company has designed an even more efficient piece of machinery. The new design would double the production output of the year-old machinery but cost Fabricut another $3 million. Roberts is afraid to bring this new equipment to the company president’s attention because he persuaded the president to invest $2 million in the machinery last year.

Requirement Explain what is relevant and irrelevant to Roberts’s dilemma. What should he do?