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Jims 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it roadworthy again. His friend, Julie, suggested that he buy a 5-year-old used Honda

Jims 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it roadworthy again. His friend, Julie, suggested that he buy a 5-year-old used Honda Civic instead for $3,000 cash. Julie estimated the following costs for the two cars:

Geo Prizm Honda Civic

Acquisition cost $15,000 $3,000

Repairs $ 3,000 ---

Annual operating costs

(gas, maintenance, insurance) $ 2,280 $2,100

The cost NOT relevant for the decision (i.e., keeping the Geo Prizm or buying the Honda Civic) is

A.

the acquisition cost of the Geo Prizm.

B.

the annual operating costs of the Honda Civic.

C.

the repair costs of the Geo Prizm.

D.

the acquisition cost of the Honda Civic.

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