Why does resale value matter for relevant costs when depreciation does not? I am

Question

Why does resale value matter for relevant costs when depreciation does not?

I am currently looking at an example that is explaining which costs are relevant and which are not. The example is about someone who lives in Boston wanting to visit their friend who lives in New York and whether she should buy a round trip train ticket or drive down. The answer key to the example states that the straight line depreciation of the car is not a relevant cost. I understand the logic behind why depreciation should not be a relevant cost. However, later on the problem comes across "reduction in resale value due to wear and tear" and the answer key claims that this aspect IS relevant to the decision. This confuses me since isn't the reduction of the resale value what depreciation is partially supposed to represent. I can understand that depreciation also includes more than just wear & tear, such as new technology become available at cheaper prices. My book clearly labels depreciation as an irrelavent cost. Is my book just not clarifying that depreciation in not ENTIRELY relevant, but rather contains some costs that may be relevant. Or am I missing something important?

Explanation / Answer

The resale value matters while the depriciation does not because the former helps in identifying the actual cost of the sales. The money obtained is more in the case of resale of the product.

If a person wnats to travela long distance by taking a car then that is a right decision to be made but it would add an extra cost of maintenance. It may show reduction in the resale value if the condition of the car is not good. If it is already kept under maintenance then it would not happen.

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