GRIFFY INC. is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first costs $25,000 to install, $5,000 to operate per year for 5 years at which time it will be sold for $7,000. The second costs $40,000 to install, $2,000 to operate per year for 7 years at which time it will be sold for $9,000. The firm's cost of capital is 5%. What is the equivalent annual cost of the best project?