Question: Dragoo Building Inc. has a crane with a book value of $240,000 and a four-year remaining life. A new crane is available at a cost

Dragoo Building Inc. has a crane with a book value of $240,000 and a four-year remaining life. A new crane is available at a cost of $615,000. Dragoo can also receive $48,000 for trading in the old pump. The new crane will reduce variable costs by $145,000 per year over its four-year life. The total impact to Dragoo over the crane's four-year life is:

Increase of $23,000.

Increase of $13,000.

Decrease of $48,000.

Decrease of $13,000.

Decrease of $615,000.

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