The minimum cost life of a new replacement machine is 6 years with a minimum equivalent annual cost of $6000. Given the existing machine's marginal cost data for the next 4 years, when should the existing machine be replaced?

Please justify the answer by showing calculations. Thank you.

Year Total Marginal Cost

1 $5400

2 $5800

3 $6200

4 $8000

1. After year one
2. After year two
3. After year three
4. After six years