Tannimen Square has 800 obsolete calculators in its inventory which have a cost of $16 each.If the calculators are reworked they could be sold for $23 each.If sold 'as-is', the revenue would be only $12 each.If Tannimen decides to rework the calculators, how much should the company be willing to invest to ensure that no additional loss occurs on the sale of the calculators?
A)$5,600
B)$8,800
C)$0
D)$3,200

Question

Quizplus · Accepted Answer

If Tannimen sells the calculators 'as-is', the revenue would be: 
$12 x 800 = $9,600

If Tannimen reworks the calculators and sells them, the revenue would be: 
$23 x 800 = $18,400

To calculate the cost of reworking the calculators, we need to find the difference between the revenue from selling reworked calculators and the revenue from selling the calculators 'as-is': 
$18,400 - $9,600 = $8,800

Therefore, Tannimen should be willing to invest $8,800 to ensure that no additional loss occurs on the sale of the calculators. Choice B is the correct answer.

Tannimen Square Has 800 Obsolete Calculators in Its Inventory Which