Tawstir Corporation has 300 obsolete personal computers that are carried in inventory at a total cost of $432,000. If these computers are upgraded at a total cost of $120,000, they can be sold for a total of $180,000. As an alternative, the computers can be sold in their present condition for $30,000.
What is the net advantage or disadvantage to the company from upgrading the computers rather than selling them in their present condition?
$480,000 disadvantage$150,000 advantage$30,000 advantage$60,000 advantage
Tawstir Corporation has 750 obsolete personal computers that are carried in inventory at a total cost of $1,102,500. If these computers are upgraded at a total cost of $49,500, they can be sold for a total of $861,750. As an alternative, the computers can be sold in their present condition for $786,375.
The sunk cost in this situation is:
$1,102,500
$861,750
$786,375
$49,500
Tawstir Corporation has 750 obsolete personal computers that are carried in inventory at a total cost of $1,102,500. If these computers are upgraded at a total cost of $49,500, they can be sold for a total of $861,750. As an alternative, the computers can be sold in their present condition for $786,375.
The sunk cost in this situation is:
$1,102,500
$861,750
$786,375
$49,500
Cybil Baunt just inherited a 1958 Chevy Impala from her late Aunt Joop. Aunt Joop purchased the car 40 years ago for $6,000. Cybil is either going to sell the car for $8,000 or have it restored and sell it for $22,000. The restoration will cost $6,000. Cybil would be better off by:
$2,000 to have the vehicle restored $6,000 to have the vehicle restored $8,000 to have the vehicle restored $10,000 to have the vehicle restored