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Tanner Company has old equipment with a book value of $177.000 and a remaining five-year useful life; Tanner is considering purchasing new equipment at a
Tanner Company has old equipment with a book value of $177.000 and a remaining five-year useful life; Tanner is considering purchasing new equipment at a price of $234,000. Tanner can sell the old equipment now for $156,000. The old equipment has vatiable manufocturing costs of $84,000 per year. The new equipment will reduce variable manufacturing costs by $35,000 per year over its five-year useful ife. The total increase or decrease in net income by replacing the old equipment with the new equipment is: Multiple Choice $35,400 decrease $68,000 decrease. $166,000 increase. $97.000 increase. 568,000 increase
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