Answer:
Increase in net annual operating income  $35,000
Explanation:  
                                                                                                     $
Variable cost of internal production
(30,000+50,000 + 20,000)                                                    100,000
Variable cost of purchase  (1.25× 100,000)                           <u>125,000</u>
Extra variable cost of buying                                                  ( 25,000)
Add savings in fixed cost from                                                15,000
Add rent from facilities                                                         <u>    45,000</u>
Increase in net annual operating income                            <u>  35,000</u>
Increase in net annual operating income  $35,000
The balance of the the fixed  cost is not relevant hence it was  not considered. This is so because whatever decision is taken, it would be incurred either way