question archive Santa's sleigh is old and in need of repair
Santa's sleigh is old and in need of repair. It will get through this year but a decision must be made on what to do for 2021. Some of Santa's tired reindeer are encouraging him to consider purchasing a drone for Christmas Eve deliveries and sending them off to a well-deserved retirement!! Here is information to help make the decision:
Original cost $25,000 Not yet purchased
Purchase price of drone 12,000
Proceeds received sale of sleigh 5,000
Annual operating costs
(Maintenance, gas, reindeer food) 2,100 1,000
a. Which information is relevant to the decision?
b. Based on financial considerations, which options should Santa choose
c. Draft a paragraph about which decision he should make.