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Q. Two partners who own Progressive Business Solutions, which presently operates out of an office in a small town near Boston, just discovered a vacancy in an office building in downtown Boston. One of the partners favours moving downtown because she believes the additional business gained by moving downtown will exceed the higher rent at the downtown location plus the cost of making the move. The other partner at PBS opposes moving downtown. He argues, "We have already paid for the office stationery, business cards and a large sign that cannot be moved or sold. We have spent so much on our present office that we can't afford to waste this money by moving now." Evaluate the second partner's advice not to move downtown. Illustrate and fully explain using an example of relevant cost (a cost whose value does affect the optimal decision) and an example of irrelevant cost (a cost whose value does not affect the optimal decision) to the business regarding this decision. Respond to at least two of your fellow students' postings.
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