Nighthawk inc. is considering disposing of an old machine with a book value of $22,500 and an estimated remaining life of three years. the old machine can be sold for $6,250. a new machine with a purchase price of $68,750 is being considered a replacement. it will have a useful life of three years and no residual value. it is estimated that the annual variable manufacturing costs will be reduced from $43,750 to $20,000 if the new machine is purchased. the differential effect on income for the entire three years for the new machine is a. $8,750 decrease b. $8,750 increase c. $31,250 decrease d. $2,925 decrease

Assume that a local bank sells two services, checking accounts and atm card services. the bank’s only two customers are mr. donethat and ms. beenthere. mr. donethat is willing to pay $8 a month for the bank to service his checking account and $2 a month for unlimited use of his atm card. ms. beenthere is willing to pay only $5 for a checking account, but is willing to pay $9 for unlimited use of her atm card. assume that the bank can provide each of these services at zero marginal cost. refer to scenario 17-5. if the bank is unable to use tying, what is the profit-maximizing price to charge for a checking account