Janko Wellspring Incorporated has a pump with a book value of $30,000 and a four-year remaining life. A new, more efficient pump is available at a cost of $51,000. Janko can receive $8,600 for trading in the old pump. The old machine has variable manufacturing costs of $31,000 per year. The new pump will reduce variable costs by $11,500 per year over its four-year life. Should the pump be replaced? Multiple Choice

Jarko Welispring incorporated has a purpp wath a book value of $30,000 and a four-veat remaining lfe. A new. more eflicient pump is avalabie at a cost of $51000. Janko can recarive $8,600 for trading in the old pump. The oid machne has variable manufacturing costs of $3000 per year. The new pump will reduce varuble costs by $11,500 per year over its four-yea ife should the pump be replaced? Mutpin Onvee No, Janko will record a loss of $17,200 if they replace the pump. Yes, because income will increase by $3,600 in total. No, because income will decrease by $11,500 per year. Yes, because income will increase by $3,600 per year. No, because the company will be $3,600 worse off in total