You are trying to decide whether to trade in your laser printer for a more recent model. Your usage pattern will remain unchanged, but the old and new printers use different toner cartridges. Are the following items relevant or irrelevant to your decision?

a. The price of the new printer

b. The price you paid for the old printer

c. The trade-in value of the old printer

d. Paper costs

e. The difference between the cost of toner cartridges

a. The price of the new printer - relevant because its a future cost

b. The price you paid for the old printer - irrelevant because it is a past cost

c. The trade-in value of the old printer - relevant because it is a future cost

d. Paper costs - irrelevant because whichever printer you use, you need paper.

e. The difference between the cost of toner cartridges - relevant because we are told in the scenario that ''old and new printers use different toner cartridges''

Explanation:

a. The price of the new printer - relevant because its a future cost

b. The price you paid for the old printer - irrelevant because it is a past cost

c. The trade-in value of the old printer - relevant because it is a future cost

d. Paper costs - irrelevant because whichever printer you use, you need paper.

e. The difference between the cost of toner cartridges - relevant because we are told in the scenario that ''old and new printers use different toner cartridges'' hence their difference in cost will be relevant to making a choice.

Generally, the costs which should be used for decision making are often referred to as "relevant costs".

Mostly, relevant costs are future costs because past costs are irrelevant, as we cannot change them in our current decisions and they are common to all alternatives that we may choose.