Starling Co
Subject:AccountingPrice: Bought3
Starling Co. is considering disposing of a machine with a book value of $22,700 and estimated remaining life of five years. The old machine can be sold for $5,100. A new high-speed machine can be purchased at a cost of 68,300. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,400 to $20,100 if the new machine is purchased. The five-year differential effect on profit from replacing the machine is a(n)
a.decrease of $46,700
b.decrease of $60,710
c.increase of $60,710
d.increase of $46,700
