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The Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total cost of $576,000. If these calculators are upgraded at a total cost of $100,000, they can be sold for a total of $160,000. As an alternative, the calculators can be sold in their present condition for $40,000. What is the financial advantage (disadvantage) to the company from upgrading the calculators?

a. $20,000
b. $(560,000)
c. $120,000
d. $(60,000

Respuesta :

Answer:

Financial advantage to the company will be $40000

So option (a) will be the correct option

Explanation:

We have given that current sales value = $40000

These calculators are upgraded at a total cost of $10000

They can be sold for a total of $160000

Incremental sales revenues from upgradng the calculators=($160,000-$100,000)=$60,000.

Hence financial advantage to the company would be =($60,000-$40,000)

So option (a) will be the correct option