Five Years Ago, a Conveyor System Was Installed in a Manufacturing

Five years ago, a conveyor system was installed in a manufacturing plant at a cost of $35,000. It was estimated
that the system, which is still in operating condition, would have a useful life of eight years, with a salvage
value of $3,000. If the firm continues to operate the system, the system's estimated market values and operating
costs for the next three years are as follows: A new system can be installed for $43,500. This system would have an estimated economic life of 10 years, with
a salvage value of $3,500. The operating costs for the new system are expected to be $1,500 per year throughout
its service life. The firm's MARR is 18%. The system belongs to the seven-year MACRS property class. The firm
's marginal tax rate is 35%.
(a) Should the existing system be replaced?
(b) If the decision in (a) is to replace the existing system, when should replacement occur?