The total increase or decrease in net income

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Reference no: EM131022238

32] Granfield Company has a piece of manufacturing equipment with a book value of $37,000 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 $21,400. Granfield can purchase a new machine for $114,000 and receive $21,400 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $18,400 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:

$19,000 increase
$73,600 decrease
$15,600 decrease
$49,900 increase
$19,000 decrease

Reference no: EM131022238

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