Downtown Candies is considering replacing the equipment it uses to make chocolate

candy bars. The equipment would cost $721,000 and lower manufacturing costs by an

estimated $170,000 a year. The equipment belongs in a 30% CCA class. The required rate of

return is 14% and the tax rate is 35%. What is the increase in net income for the second year

from this proposed project?

A. -$9,006

B. -$417

C. $25,550

D. $40,203

E. $47,200