Tawstir corporation has 800 obsolete personal computers that are carried in inventory at a total cost of $1,100,000. if these computers are upgraded at a total cost of $40,000, they can be sold for a total of $750,000. as an alternative, the computers can be sold in their present condition for $690,000. the sunk cost in this situation is:

Question

Business

Jamarion Molina

31 May, 01:27

Tawstir corporation has 800 obsolete personal computers that are carried in inventory at a total cost of $1,100,000. if these computers are upgraded at a total cost of $40,000, they can be sold for a total of $750,000. as an alternative, the computers can be sold in their present condition for $690,000. the sunk cost in this situation is:

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Answers (1)

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Madisyn Quinn · Answer 1

The answer is "1,100,000".

Explanation:

A sunk cost refers to a cost that has just been incurred and in the given scenario, the original cost that is the carrying value and that cost is sunk cost. Remember that sunk cost is different from future cost.

Thus 1,100,000 is the sunk cost in this situation.