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IMANET Exam CMA Topic 1 Question 31 Discussion

Actual exam question for IMANET's Certified Management Accountant exam
Question #: 31
Topic #: 1
[All Certified Management Accountant Questions]

In equipment-replacement decisions, which one of the following does not affect the decision-making process?

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Suggested Answer: C

All relevant costs should be considered when evaluating an equipment-replacement decision. These include the cost of the new equipment, the disposal price of the old equipment, and the operating costs of the old equipment versus the operating costs of the new equipment. The original cost or fair market value of the old equipment is a sunk cost and is irrelevant to future decisions. __


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