11 and 12

(a) All three (b) Two of the three (c) One of the three (d) None of the three Use the following information to answer Questions (11) and (12) Tingley Company has 2,000 obsolete computers that are carried in inventory at a cost of $1,350,000. If these computers are upgraded at a total cost of $280,000, they can be sold for a total of $490,000. Alternatively, Tingley can sell the computers in their present condition for $225,000. (11) The sunk cost in this situation is: (a) $1,125,000 (b) $1,350,000 (c) $490,000 (d) $225,000 (e) $1,630,000 110 000 (12) Tingley should (a) should keep the computers in inventory because either alternative would result in an unacceptable loss based on the computers' original cost should upgrade the computers because the net advantage of doing so is $490,000 (e) should upgrade the computers because the net advantage of doing so is $210,000 (d) should scrap the computers because the net advantage of doing so is $15,000 36 A B C DE