Flexsteel Industries manufactures furniture for the retail, contract, and recreational vehicle furniture markets. The company is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net cash flows of $164,800. The equipment will have an initial cost of $515,000 and have a 5- year life. If the salvage value of the equipment is estimated to be $11,000, what is the annual net income? Ignore income taxes.

A) $64,000

B) $265,600

C) $175,800

D) $153,800