DO IT! 1 | Incremental Analysis Owen T Corporation is comparing two different options. The company currently follows Option 1, with revenues of $80,000 per year, maintenance expenses of $5,000 per year, and operating expenses of $38,000 per year. Option 2 provides revenues of $80,000 per year, maintenance expenses of $12,000 per year, and operating expenses of $32,000 per year. Option 1 employs a piece of equipment that was upgraded two years ago at a cost of $22.000. If Option 2 is chosen, it will free up resources that will increase revenues by $3,000. Complete the following table to show the change in income from choosing Option 2 versus Option 1. Designate any sunk costs with an "S." Net Income Increase Option 1 Option 2 (Decrease) Sunk (S) Revenues Maintenance expenses Operating expenses Equipment upgrade Opportunity cost ACTION PLAN Past costs that cannot be changed are sunk costs. Benefits lost by choosing one option over another are opportunity costs