Starling Co. is considering disposing of a machine with a book value of $21,700 and estimated remaining life of five years. The old machine can be sold for $6,000. A new high-speed machine can be purchased at a cost of 70,000. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $22,800 to $20,400 if the new machine is purchased. The differential effect on income for the new machine for the entire five years is

increase of $52,000

decrease of $67,600

increase of $67,600

decrease of $52,000