#14

Win Inc. is considering disposing of a machine with a book value of $23,113.00 and an estimated remaining life of three years. The old machine can be sold for $5,969.00. A new machine with a purchase price of $70,878.00 is being considered as a replacement. It will have a useful life of three years and no residual value. It is estimated that annual variable manufacturing costs will be reduced from $41,580.00 to $20,756.00 if the new machine is purchased. Determine the net differential increase or decrease in cost for the entire three years for the new equipment.

Select the correct answer.

$5,969.00

$20,824.00

$-2,437.00

$44,153.00