Falcon Inc. is considering replacing one of its old factory equipment with a new one. The following data are available:

Old equipment:
Purchase cost	$190,000
Remaining useful life in years	5 years
Current book value	$90,000
Annual operating costs	$20,000 per year
Current expected selling price	$50,000
Expected sales commission	2% of expected selling price
New equipment:
Purchase cost	$150,000
Useful life in years	5 years
Residual value	$0
Annual operating costs	$5,000 per year

What would be the differential impact on income from replacing the equipment in five years?

Group of answer choices

$25,000 decrease

$26,000 increase

$26,000 decrease

$25,000 increase