2. An existing drill press has a salvage value now of $8000, which will fall to $6400 by the end of the year. The cost of lower productivity using this drill press is $4250 this year. A new-fangled drill press, being considered as a replacement, has the following salvage values and loss of productivity:

Year Salvage Productivity Loss

0 $19,200

1 $14,400 $0

2 $11,200 $1000

3 $8000 $2000

4 $4,800 $3000

Assume an interest rate of 15%. Calculate the EUAC for each year of the new-fangled drill press. Calculate the marginal cost of the existing drill press. In what year does the new-fangled drill press' EUAC fall below the marginal cost of the existing drill press and what is the amount of the new-fangled drill press' EUAC to closest dollar of that year?