Granfield Company has a piece of manufacturing equipment with a book value of $41,000 and a remaining useful life of four years. At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $22,200. Granfield can purchase a new machine for $122,000 and receive $22,200 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $19,200 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:

$23,000 decrease

$52,700 increase

$76,800 decrease

$18,800 decrease

$23,000 increase