Hayden has a no.of copiers that were bought 4yrs ago for $20000.

currently maintenance
costs $2000 a yr but maintenance agreement expires at the end of 2 yrs and there after
the annual maintenance charge will rise to $8000.The machines have current resale value
of $8000,but at the end of yr 2 their value will have fallen to $3500.By the end of yr 6 the
machines will be valueless and would be scrapped. Hayden is considering replacing the
copiers with new machines that would do the same job. These machines cost $25000,
and the co. can take out an 8 yr maintenance contract for $1000 a yr. The machines will
have no value by the end of 8 yrs and will be scrapped. Both machines are depreciated
using straight line method, and tax rate is 35 %. Assume for simplicity that the inflation
rate is zero.The real cost of capital is 7%. a) should hayden replace its copiers now?
b)When should hayden replace its copiers?

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