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TB MC Qu. 23-93 (Algo) Janko Wellspring Incorporated has a pump with a... Janko Wellspring Incorporated has a pump with a book value of

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TB MC Qu. 23-93 (Algo) Janko Wellspring Incorporated has a pump with a... Janko Wellspring Incorporated has a pump with a book value of $33,000 and a four-year remaining life. A new, more efficient pump is available at a cost of $54,000. Janko can receive $8,900 for trading in the old pump. The old machine has variable manufacturing costs of $34,000 per year. The new pump will reduce variable costs by $11,800 per year over its four- year life. Should the pump be replaced? Mutiple Choice Yes. because income will increase by $2.100 in total No, Jenko will record e loss of $17,000 if they replace the pump Yes, because income will increase by $2.100 per year No, because the company will be $2.100 worse off in total No, because income will decrease by $11.800 per year

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