A machine, currently in operation, has a market value of $4000. The machine can still be used over the next three years, but its market value will become $3000, $2500, $2,000 at the end of the first, second, and third years, respectively. The operating expenses of the machine amount to $20,000 during the first year, and will increase by $5,000 each year thereafter. This machine can be replaced by a newer model, which cost $30,000 for installation and will have an estimated economic life of 12 years, and a $2,000 market value at that time. It is estimated that annual operating expenses of the new model will average $16,000 per year. If the company uses an MARR of 12% : a) Determine the economic service life of the current machine. b) Using the Annual Equivalent Cost (AEC) of the new model, determine when the current machine should be replaced?