A company purchased field test equipment 2 years ago for $50,000 that was expected to have a useful life of 5 years with a $5000 salvage value. Its performance was less than expected, and it was upgraded for $20,000 one year ago. Increased demand now requires that the equipment be upgraded again for another $16,000 so that it can be used for 3 more years. Its annual operating cost will be $27,000 and it will have a $12,000 salvage after 3 years. If replaced now, the existing equipment will be sold for $7,000. In conducting a replacement study, the value to use for the defenders first cost to calculate the annual worth is:

a. $ 15,000

b. $ 23,000

c. $ 50,000

d. $ 70,000