State-of-the-art digital imaging equipment purchased 2 years ago for $50,000 had an expected useful life of 5 years and a $5000 salvage value. After its poor installation performance, it was upgraded for $20,000 1 year ago. Increased demand now requires another upgrade for an additional $26,000 so that it can be used for three more years. Its new annual operating cost will be $30,000 with a $13,000 salvage after the 3 years. Alternatively, it can be replaced with new equipment costing $64,000, an estimated AOC of $15,000, and an expected salvage of $24,000 after 3 years. If replaced now, the existing equipment can be traded for only $9,000. Use a MARR of 12% per year.