Granfleld Company has a plece of manufacturing equipment with a book value of $41,500 and...
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Granfleld Company has a plece of manufacturing equipment with a book value of $41,500 and a remaining useful life of four years. At the end of the four years the equipment will have a zero-salvage value. Granfield can purchase new equipment for $129,000 and recelve $23,200 in return for trading in its current equipment. The current equipment has varlable manufacturing costs of $42,000 per year. The new equipment will reduce variable manufacturing costs by $20,500 per year over its four-year life. The total increase or decrease in income by replacing the current equipment with the new equipment is: $23,800 increase $17,700 decrease $82,000 increase $23,800 decrease $56,050 increase
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