Hartley's Meat Pies is considering replacing its existing delivery van with a new one.The new van can offer considerable savings in operating costs.Information about the existing van and the new van follow:

If Hartley's Meat Pies replaces the existing delivery van with the new one,over the next 10 years operating income will ________.
A)decrease by $95,000
B)increase by $75,000
C)decrease by $75,000
D)increase by $95,000

Question

Hartley's Meat Pies is considering replacing its existing delivery van with a new one.The new van can offer considerable savings in operating costs.Information about the existing van and the new van follow:

If Hartley's Meat Pies replaces the existing delivery van with the new one,over the next 10 years operating income will ________.
A)decrease by $95,000 
B)increase by $75,000 
C)decrease by $75,000 
D)increase by $95,000

Quizplus · Accepted Answer

New van ($15,000 × 10 years)- Existing van ($22,500 × 10 years)= $75,000 less in operating costs,which results in a $75,000 increase in operating income.

Hartley's Meat Pies Is Considering Replacing Its Existing Delivery Van