. Sally wants to purchase a new sofa because she purchased a new home at the beach. Sally visited two stores and she narrowed down her choices to a red sofa and a blue sofa. Sally owns pets so she considers the cost of insurance to insure each sofa. Sally compiled the following data and she realizes that the sales tax to purchase the sofa is 10% in her state.

Red Sofa Blue Sofa

Price 8000 8400

Insurance 950 350 Which sofa should Sally purchase? What costs are relevant in her decision? Why?