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Business, 08.11.2019 23:31 issagirl05

Granfield company has a piece of manufacturing equipment with a book value of $35,500 and a remaining useful life of four years. at the end of the four years the equipment will have a zero salvage value. the market value of the equipment is currently $21,100. granfield can purchase a new machine for $111,000 and receive $21,100 in return for trading in its old machine. the new machine will reduce variable manufacturing costs by $18,100 per year over the four-year life of the new machine. the total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:
a. $17,500 increase
b. $72,400 decrease
c. $14,400 decrease
d. $48,850 increase
e. $17,500 decrease

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