22.

Starling Co. is considering disposing of a machine with a book value of $23,300 and estimated remaining life of five years. The old machine can be sold for $5,500. A new high-speed machine can be purchased at a cost of 70,300. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $22,600 to $20,000 if the new machine is purchased. The differential effect on income for the new machine for the entire five years is

a.decrease of $67,340

b.decrease of $51,800

c.increase of $67,340

d.increase of $51,800