The Tingey Company has 500 obsolete microcomputers that are carried in inventory at a total cost of £720,000. If these microcomputers are upgraded at a total cost of £100,000, they can be sold for a total of £160,000. As an alternative, the microcomputers can be sold in their present condition for £50,000.
-What is the net advantage or disadvantage to the company from upgrading the computers rather than selling them in their present condition?
A)£110,000 advantage.
B)£660,000 disadvantage.
C)£ 10,000 advantage.
D)£ 60,000 advantage.

Question

Quizplus · Accepted Answer

Upgrading costs £100,000 and increases sale price to £160,000, netting £60,000. Selling as-is nets £50,000. The advantage of upgrading is £60,000 - £50,000 = £10,000.

The Tingey Company Has 500 Obsolete Microcomputers That Are Carried