Answer:
b. $8,800
Explanation:
<u>Alternative 1</u>
Cost of calculators with upgrade = $26,800 + $10,000 = $36,800
Selling Price of Calculators after upgrade =$30,000
Loss on selling after upgrade = $36,800-$30,000 =$6,800 loss
<u>Alternative 2</u>
Selling price of calculators without upgrade = $11,200
Loss on selling without upgrade = $26,800 - $11,200 = $15,600
Therefor, it is advisable to upgrade the calculators because Tolar Corporation would incur loss of only $6,800 after the upgrade. If it does not upgrade, it will incur a loss of $15,600.
If Tolar Corporation went for the upgrade, it will have a financial advantage of $8,800 ($15,600-$6,800)
