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N Granfield Company has a piece of manufacturing equipment with a book value of $40,500 and a remaining useful life of four years. At the

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N Granfield Company has a piece of manufacturing equipment with a book value of $40,500 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 $123,000 and receive $22,400 in return for trading in its current equipment. The current equipment has variable manufacturing costs of $40,000 per year. The new equipment will reduce variable manufacturing costs by $19,500 per year over its four- year life. The total increase or decrease in income by replacing the current equipment with the new equipment is: 3 points eBook Multiple Choice $22,600 decrease $78,000 Increase

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