Granfield Company has a piece of manufacturing equipment with a book value of $47,000 and a remaining useful life of four years. At the end of the four years the equipment will have a zero-salvage value. Granfield can purchase new equipment for $162,000 and receive $27,600 in return for trading in its current equipment. The current equipment has variable manufacturing costs of $53,000 per year. The new equipment will reduce variable manufacturing costs by $26,000 per year over its four-year life. The total increase or decrease in income by replacing the current equipment with the new equipment is:

• $30,400 decrease

• $70,900 increase

• $104,000 increase

• $16,600 decrease

• $30,400 increase