Answer Happy

Sooky has a spotter truck with a book value of $40,000 and a remaining useful life of five years. At the end of the five years the spotter truck will have a zero-salvage value. Sooky can purchase a new spotter truck for $120,000 and receive $31,000 in return for trading in its old spotter truck. The old spotter truck has variable manufacturing costs of $75,000 per year. The new spotter truck will reduce variable manufacturing costs by $25,000 per year over the five-year life of the new spotter truck. The total increase or decrease in Income by replacing the current spotter truck with the new truck is: $36,000 decrease $31,000 increase $120,000 decrease $31.000 decrease $36,000 increase