28.

Starling Co. is considering disposing of a machine with a book value of $22,800 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 67,700. 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 $22,700 to $19,000 if the new machine is purchased. The differential effect on income for the new machine for the entire five years is

a.increase of $56,810

b.decrease of $56,810

c.increase of $43,700

d.decrease of $43,700