Question
Nathan T Corporation is comparing two different options. Nathan T currently uses Option 1, with revenues of $72,000 per year, maintenance expenses of $5,500 per
Nathan T Corporation is comparing two different options. Nathan T currently uses Option 1, with revenues of $72,000 per year, maintenance expenses of $5,500 per year, and operating expenses of $28,600 per year. Option 2 provides revenues of $66,000 per year, maintenance expenses of $5,500 per year, and operating expenses of $24,200 per year. Option 1 employs a piece of equipment which was upgraded 2 years ago at a cost of $19,000. If Option 2 is chosen, it will free up resources that will bring in an additional $4,500 of revenue. Complete the following table to show the change in income from choosing Option 2 versus Option 1. Designate Sunk costs with an "S" otherwise select "NA". (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Option 1
Option 2
Net Income
Increase (Decrease)Sunk (S)Revenues$
enter revenues in dollars
$
enter revenues in dollars
$
enter revenues in dollars
select an option
NAS Maintenance expenses
enter maintenance expenses in dollars
enter maintenance expenses in dollars
enter maintenance expenses in dollars
select an option
NAS Operating expenses
enter operating expenses in dollars
enter operating expenses in dollars
enter operating expenses in dollars
select an option
SNA Equipment upgrade
enter the cost of equipment upgrade in dollars
enter the cost of equipment upgrade in dollars
enter the cost of equipment upgrade in dollars
select an option
SNA Opportunity cost
enter the opportunity cost in dollars
enter the opportunity cost in dollars
enter the opportunity cost in dollars
select an option
NAS $
enter a total amount
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