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

The net advantage is calculated by considering the cost of upgrading versus the potential increase in value or savings from the upgrade. The $10,000 advantage suggests that the benefits of upgrading outweigh the costs by this amount.

The Tingey Company Has 500 Obsolete Microcomputers That Are Carried