6. 13.39 You provide consulting services as a sole proprietor business owner. You know it is economically difficult to justify the purchase of a new car when your currently owned vehicle is operating okay; however, you decide to try, anyway. The information you collected about your current, 5-year-old car versus a new, fuel-efficient hybrid, safety-loaded car is shown on the next page. The AOC is calculated at 25,000 miles driven per year, with costs of 60¢/mile (current car) and 48¢/mile (new car, based on better mileage and lower maintenance cost). Once this decision is made, you plan to retain the current car for 5 more years; retention of the new car may vary, as described below. The low trade-in offer from the dealership on the current car of $2000, well below the Kelley Blue Book® value you found online, is a “cash now” offer, not a reduction in the cost of the new car. You take no annual depreciation on your car. At i = 8% per year, perform an AW-based replacement analysis and select the economically better alternative, under the following assumptions: