Question
Nathan T Corporation is comparing two different options. Nathan T currently uses Option 1, with revenues of $62,000 per year, maintenance expenses of $4,800 per
Nathan T Corporation is comparing two different options. Nathan T currently uses Option 1, with revenues of $62,000 per year, maintenance expenses of $4,800 per year, and operating expenses of $25,000 per year. Option 2 provides revenues of $58,000 per year, maintenance expenses of $4,800 per year, and operating expenses of $21,100 per year. Option 1 employs a piece of equipment which was upgraded 2 years ago at a cost of $16,000. If 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 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 Maintenance expenses enter maintenance expenses in dollars enter maintenance expenses in dollars enter maintenance expenses in dollars select an option Operating expenses enter operating expenses in dollars enter operating expenses in dollars enter operating expenses in dollars select an option 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 Opportunity cost enter the opportunity cost in dollars enter the opportunity cost in dollars enter the opportunity cost in dollars select an option $enter a total amount
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