Vaughn Manufacturing has several outdated computers that cost a total of $17800 and could be sold as scrap for $5000. They could be updated for an additional $2000 and sold. If Vaughn updates the computers and sells them, net income will increase by $9000.
Sale of outdated products generates $5000 Net income after updating = $5000 + $9000 = $14000 Gross sale value of updated product = $14000 + $2000 = $16000
