$3.$ A company plans to replace $4-$year$-$old equipment which is still in use with a new one. The original investment for the $4-$year$-$old equipment was $\backslash (\backslash$$ $50,000\backslash ),$ and a $10-$year depreciation with $\backslash (\backslash$$ $2,000\backslash )$ salvage value was charged using straight$-$line method. It can now be sold for $\backslash (\backslash$$ $6,000\backslash ).$

A new equipment can be installed with for $\backslash (\backslash$$ $60,000\backslash ),$ and it would save the company $\backslash (\backslash$$ $10,000\backslash )$ per year on operating expenses. The $10-$year straight$-$line depreciation with no salvage value applies to the new equipment.

The income tax rate is $\backslash (25\backslash \%\backslash ).$ All costs other than depreciation are the same for both equipment. The company requires an after$-$tax return of $\backslash (15\backslash \%\backslash )$ on capital invested for this type of project. Should the replacement be made at this time?