Marine Industrial Coatings, Inc. is considering replacing its existing computer system with a new computer system. The new system can offer considerable savings in computer processing and inventory management costs. Information about the existing system and the new system follow: | Existing Computer $10,000 $ 3,500 $ 6,000 New Computer $15,000 $ 2,000 Original cost Annual operating cost Accumulated depreciation Current salvage value of the existing system Remaining life in 5 years Salvage value in 5 years $ 4,000 5 years $ 0 0 Annual depreciation | $ 2,000 $3,000 Required: a. Which costs are sunk costs? b. Which costs are relevant to the decision? c. What are the changes in pretax operating income and in cash flow over the next 5 years assuming that Marine Industrial Coatings replaces the existing computer system with the new one? d. What do you recommend and what other factors should Marine Industrial Coatings consider when making this decision