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Cullumber T Corporation is comparing two different options. Cullumber T currently uses Option 1, with revenues of $66,000 per year, maintenance expenses of $5,100 per
Cullumber T Corporation is comparing two different options. Cullumber T currently uses Option 1, with revenues of $66,000 per year, maintenance expenses of $5,100 per year, and operating expenses of $26,500 per year. Option 2 provides revenues of $61,000 per year, maintenance expenses of $5,100 per year, and operating expenses of $22,400 per year. Option 1 employs a piece of equipment which was upgraded 2 years ago at a cost of $17,000. |f Option 2 is chosen, it will free up resources that will bring in an additional $4,000 of revenue. Complete the following table to show the change in income from choosing Option 2 versus Option 1. Designate Sunk costs with an "5\" otherwise select \"NA". (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).) Net Income Option 1 Option 2 Increase (Decrease) Sunk (S) Revenues $ $ $ V Maintenance expenses Operating expenses Equipment upgrade Opportunity cost v Revenues Maintenance expenses Operating expenses Equipment upgrade Opportunity cost Option 1 Option 2 Net Income Increase (Decrease) Sunk (S) Net Income Option 1 Option 2 Increase (Decrease) Sunk (S) Revenues $ 66000 $ 65000 $ -1000 Maintenance 5100 i 5100 i expenses 0 Operating 26500 22400 i expenses -4100 Equipment S upgrade S 0 Opportunity 4000 i cost 0 4000 $ -1100
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