An exploration company uses a mobile generator to produce power at remote sites. The existing generator is now 3 years old. It cost $11000 when purchased. Its current salvage value is $4000 and the salvage value is expected to decrease in each of the next 4 years to $1400,$980, $686 and $0, respectively. It's operating and maintenance costs are now $2000 per year and these costs are expected to rise by $500 per year