Berlin Company has a machine with a book value of $$62,000$ and a five$-$year remaining life. A new

machine is available at a cost of $$89,000$ and Berlin can also receive $$38,000$ for trading in the old

machine. The new machine will reduce variable manufacturing costs by $$13,000$ per year over its

five$-$year life. Should Berlin replace the old machine with the new machine?

No$,$ because the income will decrease by $$14,000$ in total.

Yes, because the income will increase by $$23,000$ in total.

No$,$ because the income will decrease by $$10,000$ in total.

Yes, because income will increase by $$103,000$ in total.

Yes, because income will increase by $$23,000$ in total.

No$,$ because the company will be $$23,000$ worse off in total.

Yes, because income will increase by $$14,000$ in total.

Yes, because income will increase by $$10,000$ in total.

The company will not be better or worse off by replacing the machine.