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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 Maintenance expenses Operating expenses Equipment upgrade Opportunity cost $
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