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What is the answer to this? Carla Vista T Corporation is comparing two different options. Carla Vista T currently uses Option 1, with revenues of
What is the answer to this?
Carla Vista T Corporation is comparing two different options. Carla Vista T currently uses Option 1, with revenues of $74,000 per year, maintenance expenses of $5,700 per year, and operating expenses of $29,600 per year. Option 2 provides revenues of $68,000 per year, maintenance expenses of $5,700 per year, and operating expenses of $25,100 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).)Step by Step Solution
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