Janko Wellspring Incorporated has a pump with a book value of $$36,000$ and a four$-$year remaining life. A new, more efficient pump is available at a cost of $$57,000.$ Janko can receive $$9,200$ for trading in the old pump. The old machine has variable manufacturing costs of $$37,000$ per year. The new pump will reduce variable costs by $$13,200$ per year over its four$-$year life. Should the pump be replaced?

Multiple Choice

No$,$ because income will decrease by $$13,200$ per year.

Yes, because income will increase by $$5,000$ in total.

No$,$ Janko will record a loss of $$18,400$ if they replace the pump.

Yes, because income will increase by $$5,000$ per year.

No$,$ because the company will be $$5,000$ worse off in total.