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11 Janko Wellspring Incorporated has a pump with a book value of $35,000 and a four-year remaining life. A new, more efficient pump is available
11 Janko Wellspring Incorporated has a pump with a book value of $35,000 and a four-year remaining life. A new, more efficient pump is available at a cost of $56,000. Janko can receive $9,100 for trading in the old pump. The old machine has variable manufacturing costs of $36,000 per year. The new pump will reduce variable costs by $13,100 per year over its four-year life. Should the pump be replaced? Multiple Choice Print O Yes, because income will increase by $5,500 in total. O Yes, because income will increase by $5,500 per year. No, because the company will be $5,500 worse off in total. O No, because income will decrease by $13,100 per year. No, Janko will record a loss of $18,200 if they replace the pump
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