Rubber City Cycles Manufactures Carbon Fiber Bicycle Frames for Professional

Rubber City Cycles manufactures carbon fiber bicycle frames for professional racing and avid amateur cyclists.Rubber City has found a CNC (computer numerical control) machine that will significantly reduce manufacturing waste while improving the quality of the frames.The new CNC machine will increase annual fixed costs by $13,750,but will decrease variable cost per unit by $150.Rubber City expects to sell 750 frames next year.
Annual data for the current system are as follows:

By what amount will Rubber City's operating income increase (decrease) if they purchase the new CNC machine?

A) $98,750
B) ($98,750)
C) $312,500
D) ($312,500)