Junior Bakeries is considering to replace its baking system and either buying or leasing a new system. Operating and maintaining the old system costs $$32,000$ annually, it has a

remaining life of $8$ years, and an estimated salvage value of $$5,000$ at that time.

Junior Bakeries can buy a new system for $$250,000$; it will be worth $$25,000$ in $8$ years; and it will have annual operating and maintenance costs of $$18,000.$ If they decide to buy the

new system, they will traded$-$in the old system for $$20,000.$

Leasing a new system will cost $$26,000$ per year, and they will need to make this payment at the beginning of the year, plus operating costs of $$9,\frac{000}{?}$ year, which are to be paid at

the end of the year. If the new system is leased, they will sell the old system for $$10,000.$

With an MARR of $15\%$ and an $8$ year planning horizon, determine the minimal EUAC given the options of: $1)$ keeping the existing system; $2)$ purchasing a new system; or $3)$ leasing a

new system?

Note: Use the cash flow approach.

buying new: $$17,270\mathrm{.}13$

keeping current system: $$31,635\mathrm{.}75$

buying new: $$50,189\mathrm{.}02$

leasing new system: $$38,900\mathrm{.}00$