Tawstir Corporation Has 800 Obsolete Personal Computers That Are Carried

question 47

Multiple Choice

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.
-Suppose the selling price of the upgraded computers has not been set. At what selling price per unit would the company be as well off upgrading the computers as if it just sold the computers in their present condition?

• A)$86.50
• B)$887.50
• C)$912.50
• D)$562.50

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Definitions:

Construction Supplies

Materials and goods used in the building and construction industry.

Costs of Debt

The effective rate that a company pays on its total debt, including interests and fees.

Costs of Equity

The return that investors require for investing in a company's equity, reflecting the risk associated with owning the equity of the company.