Question: Nathan T Corporation is comparing two different options. Nathan T currently uses Option 1, with revenues of $65,000 per year, maintenance expenses of $5,000 per

Nathan T Corporation is comparing two different options. Nathan T currently uses Option 1, with revenues of $65,000 per year, maintenance expenses of $5,000 per year, and operating expenses of $26,000 per year. Option 2 provides revenues of $60,000 per year, maintenance expenses of $5,000 per year, and operating expenses of $22,000 per year Option 1 employs a piece of equipment which was upgraded 2 years ago at a cost of $17,000. If Option 2 is chosen, it will free up resources that will bring in an additional $4,000 of revenue. Complete the following table to show the change in income from choosing Option 2 versus Option 1. Designate Sunk costs with an S otherwise select "NA" Net Income Increase (Decrease) Option 1 Option 2 Sunk (S) Revenues 650 6000 500 NA v Maintenance expenses Operating expenses Equipment upgrade 500 500 NA 260 2200 400 NA T 1700 -17000 Opportunity cost 9000 9000 NA T 8000
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