Don Baxter's 6-year-old Chevrolet Impala requires repairs estimated at $5,400 to make it roadworthy again. His friend Aaron Bloom suggested that he buy a 6-yearold Ford Escort instead for $5,400 cash. Aaron estimated the following costs for the two cars:

COSTS IMPALA ESCORT

Acquisition cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,000 $5,400

Repairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,400 0

Annual operating costs: gas, maintenance, insurance. . . . . . . . . . . 2,900 1,800

(a)What costs are and are not relevant to this decision? Why?

(b)What should Don do? Explain.