The EUAC of the challenger for an asset with an economic life of 5 years is $8,500. The marginal cost per year of the defender is provided in the table below. Determine when the defender should be replaced.

\begin{tabular}{|l|l|l|l|l|l|} \hline Year & 1 & 2 & 3 & 4 & 5 \\ \hline Marginal Cost, \$ & 7,500 & 8,000 & 8,250 & 8,750 & 9,000 \\ \hline \end{tabular}