Relevant and sunk costs Don Baxters 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-year-old 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 cost (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.

(c) What quantitative and qualitative factors are relevant to his decision? Why?