Win Inc. is considering disposing of a machine with a book value of $20,469.00 and an estimated remaining life of three years. The old machine can be sold for $5,846.00. A new machine with a purchase price of $68,232.00 is being considered as a replacement. It will have a useful life of three years and no residual value. It is estimated that annual variable manufacturing costs will be reduced from $42,146.00 to $20,059.00 if the new machine is purchased. Determine the net differential increase or decrease in cost for the entire three years for the new equipment.

Select the correct answer.

$5,846.00

$22,087.00

$3,875.00

$42,327.00