Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $46,000 and a remaining useful life of four years. It can be sold now for $56,000. Variable manufacturing costs are $45,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is four years.

Machine AMachine BPurchase price$ 116,000$ 128,000Variable manufacturing costs per year20,00014,000

(a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B.

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