A 5 year-old tooling kit that was purchased new for $9000 has a current market value of $4000 and expected 0&M costs of $3000, increasing by $1200 per year. Future market values are expected to decline by 25% annually (going forward). The kit can be used for another 3 years at most. The optimal replacement kit costs $8000 and has 0&M costs starting at $2500 per year, increasing by $2000 per year. Salvage value for the new kit at the end of the first year is $4000 and falls by $1000 per year thereafter (until zero). The new model kit will be needed indefinitely. Assume a unique minimum AEC(15%) for both kits (both the current and replacement kit). The MARR is 15%. 1) What is the AECc* ? a) Less than 6925.70 b) 6925.70-6945.70 c) 6945.70-6965.70 d) 6965.70-6985.70 e) More than 6985.70