How do you solve this? Is there a formula I need to know?
How do you solve this? Is there a formula I need to know? I'm not just looking for the answers because I have other problems similar to this question.
Hi-Tech Inc. has several outdated computers that cost a total of $17,800 and could be sold as scrap for $4,600. They could be updated for an additional $2,400 and sold. If Hi-Tech updates the computers and sells them, net income will increase by $9,000. At what price were the updated versions sold? Entry field with incorrect answer now contains modified data
- MorningfoxLv 75 years agoFavorite Answer
There is no "textbook" formula to memorize, you're supposed to work it out with logic.
(1) sell as scrap: get $4,600
(2) update for $2,400, sell for ________, net income increase by $9000 (over the $4,600 the company would have gotten as scrap).
Therefore, with option (2), the company gets +2,400 (to recover the update costs) +4,600 (to match option 1) + 9,000 (for the net income increase).