Elton International Is Considering the Installation of a New Computer

Elton International is considering the installation of a new computer system that will cut annual operating costs by $12,000.The system will cost $48,000 to purchase and install.This system is expected to have a 5-year life and will be depreciated to zero using straight-line depreciation.What is the amount of the earnings before interest and taxes?

A) -$9,600
B) $1,000
C) $2,400
D) $11,000
E) $20,600