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Hartley's Meat Pies is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information

Hartley's Meat Pies is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow:

Existing van New van

Original cost $56,000 $95,000

Annual operating cost $22,500 $15,000

Accumulated depreciation $33,000

Current salvage value of the existing van $27,500

Remaining life 10 years 10 years

Salvage value in 10 years $ 0 $ 0

Annual depreciation $2,300 $9,500

If Hartley's Meat Pies replaces the existing delivery van with the new one, over the next 10 years cash flow will ________.

A) increase by $36,000

B) increase by $75,000

C) decrease by $75,000

D) decrease by $36,000

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