Answer Happy

Tanner Company has old equipment with a book value of $168,000 and a remaining five-year useful life. Tanner is considering purchasing new equipment at a price of $216,000. Tanner can sell the old equipment now for $144,000. The old equipment has variable manufacturing costs of $78,000 per year. The new equipment will reduce variable manufacturing costs by $32,000 per year over its five-year useful life. The total increase or decrease in net income by replacing the old equipment with the new equipment is: Multiple Choice $33.600 decrease $62.000 decrease. $154,000 increase. 588.000 Increase 502.000 increase