Answer:
If the company upgrades the units, income will increase by $20,000 (compared to sell as-is).
Explanation:
Giving the following information:
Units= 400
If these computers are upgraded at a total cost of $100,000, they can be sold for a total of $160,000.
As an alternative, the computers can be sold in their present condition for $40,000.
We won't take into consideration costs before the upgrade, because they will remain in both options.
Sell as-is:
Effect on income= $40,000 increase
Continue processing:
Effect on income= 160,000 - 100,000= $60,000 increase
If the company upgrades the units, income will increase by $20,000 (compared to sell as-is).
