Question: Week 2 DQ 1Explain a situation you have observed (or read about) in which a firm made a decision considering irrelevant costs or did not
Week 2 DQ 1Explain a situation you have observed (or read about) in which a firm made a decision considering irrelevant costs or did not consider relevant costs. What was the outcome of the decision, and what could have been done differently?A trucking company with which I am familiar was looking for a more cost-effective way to heat their trucks when on long trips from Michigan to California. During the winter months, the truck drivers would have to leave the engines running to prevent the fluids in the engine from freezing and to heat the inside of the truck so the drivers could sleep. The company investigated installing small generators mounted on the back of each truck that would accomplish both tasks. The miles per gallon saved would be 2-3 miles. Over a 6 to 7 day trip, that amounted to a substantial amount of money. The company believed this was a good investment, so they borrowed the money and installed the generators. However, the company failed to consider the relevant cost of interest. At the time, the company was paying 18% interest on the loans for the generators. Therefore, the company was better off not installing thegenerators as it
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