The Tolar Corporation Has 400 Obsolete Desk Calculators That Are

question 403

Multiple Choice

The Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total cost of $26,800. If these calculators are upgraded at a total cost of $10,000, they can be sold for a total of $30,000. As an alternative, the calculators can be sold in their present condition for $11,200.Assume that Tolar decides to upgrade the calculators. At what selling price per unit would the company be as well off as if it just sold the calculators in their present condition?

• A) $8 per calculator
• B) $30 per calculator
• C) $53 per calculator
• D) $67 per calculator

---

Definitions:

Debt-to-Equity Ratio

A measure of a company's financial leverage indicating the proportion of company financing from debt compared to equity.

Balance Sheet

A Balance Sheet is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Corporation

A legal entity owned by shareholders, offering limited liability and existing independently of its owners.

Times Interest Earned

A financial metric indicating how many times a company's operating income can cover its interest expense, used to assess financial stability.