3. A machine was purchased three years ago for $65,000. At the present time, it can be sold for $40,000 and replaced by a newer model having a purchase price of $70,000; or it can be kept in service for four more years. The assembly line, if purchased, has a useful life of not more than four years. The MV and annual costs of challenger and defender are shown in the table below. If the before-tax MARR is 8%, what is the economic life of the challenger and when should the old assembly machine be replaced? Draw cash flow diagrams for Total Marginal Costs for challenger only. (Points 25) EOY Defender 0 & M Costs 0 Challenger MV O & M Costs $70,000 $56,000 $5,500 $44,000 $6,800 $34,000 $7,400 $22,000 $9,700 MV $40,000 $30,000 $20,000 $12,000 $4,000 2 3 $8,500 $13,500 $15,000 $17,000 4