Ouzts Corporation is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below: What is the financial advantage (disadvantage) of Alternative B over Alternative A?
A) $105,000
B) $(23,000)
C) $128,000
D) $(116,500)

Question

Ouzts Corporation is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below:  What is the financial advantage (disadvantage) of Alternative B over Alternative A?
A) $105,000 
B) $(23,000) 
C) $128,000 
D) $(116,500)

Quizplus · Accepted Answer

To find the financial advantage (disadvantage) of Alternative B over Alternative A, we subtract the costs of Alternative A from the costs of Alternative B: 
Cost of Alternative A = $215,000 + $175,000 + $80,000 = $470,000 
Cost of Alternative B = $120,000 + $325,000 + $100,000 + $10,000 = $555,000 
Financial advantage (disadvantage) of Alternative B over Alternative A = Cost of Alternative B - Cost of Alternative A = $555,000 - $470,000 = $(85,000) 
Therefore, Alternative B has a disadvantage of $(85,000) compared to Alternative A.

The best choice would depend on a variety of factors and cannot be determined solely based on the costs listed. Additional information such as potential revenues, long-term maintenance costs, and overall feasibility should also be considered before making a decision.

Ouzts Corporation Is Considering Alternative a and Alternative B