Last year, a decision was made to keep the same equipment in lieu of buying new equipment. The old equipment's trade-in value last year was $4000 and its value this year is $2000. The operating cost was $700 last year. If bought last year, the new equipment would have cost $13K, the salvage value after 8 years would be $2000, and it would have an annual operating cost of $4000.

If bought last year, what would have been the EUAC of the new equipment (in dollars) at 15% interest rate per year?

What would have been the correct decision?