4. A machine was purchased 3 years ago for $140,000 but needs to be upgraded today if it is to be used on a new project. The current market value of the equipment is $40,000. The upgrade costs are $70,000 (required today). The operating costs of this machine is $85,000/year and has a salvage value of $30,000 in 3 years. If the current machine is upgraded it will be kept in service for 3 years. Another machine is being considered to replace the current machine instead of upgrading it. Further details of this machine can be found in the table below. The operating costs of this machine is $65,000/year and has an initial cost of $220,000. MARR = 15%. You are asked to make the best decision based upon a 3 year planning horizon. Should you replace your current equipment with the proposed equipment? Years from today Salvage Value of Proposed New Machine $50,000 1 2 $50,000 3 $50,000 4 $50,000 5 $50,000 6 $20,000 7 $20,000 8 $20,000