TB MC Qu$.23-93($Static$)$ Janko Wellspring Incorporated has a pump with a$...$

Janko Wellspring Incorporated has a pump with a book value of $$24,000$ and a four$-$year remaining life. A new, more efficient pump is available at a cost of

$$45,000.$ Janko can receive $$8,000$ for trading in the old pump. The old machine has variable manufacturing costs of $$25,000$ per year. The new pump will reduce

variable costs by $$10,000$ per year over its four$-$year life. Should the pump be replaced?

Multiple Choice

Yes, because income will increase by $$3,000$ in total.

Yes, because income will increase by $$3,000$ per year.

No$,$ because the company will be $$3,000$ worse off in total.

No$,$ because income will decrease by $$10,000$ per year.