The Tolar Company has 400 obsolete desk calculators that are carried in inventory at a total cost of $26,800. If these calculators are upgraded at a total cost of $10,000, they can be sold for a total of $30,000. As an alternative, the calculators can be sold in their present condition for $11,200.

a. The sunk cost in this situation is (3 Marks): b. What is the net advantage or disadvantage to the company from upgrading the calculators (5 Marks)?