Hartley's Meat Pies is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs.

Information about the existing van and the new van follow:

Existingvan New van

Original cost

$$50,000,$$$92,000$

Annual operating cost $,$$$19,500,$$$14,000$

Accumulated depreciation $$34,000-$

Current salvage value of the existing

van

Remaining life

$9$ years $9$ years

Salvage value in $9$ years

$$0$

$$0$

Annual depreciation

$$1778$

$$10,222$

If Hartley's Meat Pies replaces the existing delivery van with the new one, over the next $8$ years operating income will:

increase by $$98,000$

decrease by $$98,000$

increase by $$60,000$

decrease by $$60,000$