Granfield Company has a piece of manufacturing equipment with a book value of $40,000 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 $22,000.Granfield can purchase a new machine for $120,000 and receive $22,000 in return for trading in its old machine.The new machine will reduce variable manufacturing costs by $19,000 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)$22,000 decrease
B)$76,000 increase
C)$18,000 decrease
D)$52,000 increase
E)$22,000 increase

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The Answer of Granfield Company has a piece of manufacturing equipment with a book value of $40,000 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 $22,000.Granfield can purchase a new machine for $120,000 and receive $22,000 in return for trading in its old machine.The new machine will reduce variable manufacturing costs by $19,000 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)$22,000 decrease
B)$76,000 increase
C)$18,000 decrease
D)$52,000 increase
E)$22,000 increase

Granfield Company Has a Piece of Manufacturing Equipment with a Book