Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below. What is the financial advantage (disadvantage) of Alternative Y over Alternative X?
A) $(132,000)
B) $119,000
C) $145,000
D) $(26,000)

Question

Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below.  What is the financial advantage (disadvantage) of Alternative Y over Alternative X?
A) $(132,000) 
B) $119,000 
C) $145,000 
D) $(26,000)

Quizplus · Accepted Answer

The financial advantage (or disadvantage) of Alternative Y over Alternative X can be calculated by subtracting the costs of X from the costs of Y. Y costs $238,000 while X costs $262,000. Therefore, the financial advantage of Y over X is $238,000 - $262,000 = $(24,000). This means that Y is less financially attractive than X.

Therefore, the best choice is X.

Two Alternatives, Code-Named X and Y, Are Under Consideration at Guyer