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 $50,000 $92,000 Annual operating cost $19,500 $14,000 Accumulated depreciation $34,000 — Current salvage value of the existing van $25,500 — Remaining life 9 years 9 years Salvage value in 9 years $ 0 $ 0 Annual depreciation $1778 $10,222 If Hartley's Meat Pies replaces the existing delivery van with the new one, over the next 8 years operating income will:increase by $98,000decrease by $98,000increase by $60,000decrease by $60,000 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:Original costExisting van New van$50,000$92,000Annual operating cost$19,500$14,000Accumulated depreciation$34,000Current salvage value of the existing$25,500vanRemaining life9 years9 yearsSalvage value in 9 years$ 0$0Annual depreciation$1778$10,222If Hartley's Meat Pies replaces the existing delivery van with the new one, over the next 8 years operating income will:increase by $98,000decrease by $98,000increase by $60,000decrease by $60,000

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Answered: Hartley's Meat Pies is considering…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 about the existing van and the new van follow: Existing van New van Original cost $50,000 $92,000 Annual operating cost $19,500 $14,000 Accumulated depreciation $34,000 — Current salvage value of the existing van $25,500 — Remaining life 9 years 9 years Salvage value in 9 years $ 0 $ 0 Annual depreciation $1778 $10,222 If Hartley's Meat Pies replaces the existing delivery van with the new one, over the next 8 years operating income will:

increase by $98,000

decrease by $98,000

increase by $60,000

decrease by $60,000

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:
Original cost
Existing van New van
$50,000
$92,000
Annual operating cost
$19,500
$14,000
Accumulated depreciation
$34,000
Current salvage value of the existing
$25,500
van
Remaining life
9 years
9 years
Salvage value in 9 years
$ 0
$0
Annual depreciation
$1778
$10,222
If Hartley's Meat Pies replaces the existing delivery van with the new one, over the next 8 years operating income will:
increase by $98,000
decrease by $98,000
increase by $60,000
decrease by $60,000

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