1) Granfield Company has a piece of manufacturing equipment with a book value of $44,000 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 $22,800. Granfield can purchase a new machine for $128,000 and receive $22,800 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $19,800 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:

2) Ahngram Corp. has 1,000 defective units of a product that cost $3.70 per unit in direct costs and $7.20 per unit in indirect cost when produced last year. The units can be sold as scrap for $4.70 per unit or reworked at an additional cost of $3.20 and sold at full price of $14.10. The incremental net income (loss) from the choice of reworking the units would be