14.14 Advanced. A supermarket is trying to determine the optimal replacement policy for its fleet of delivery vehicles. The total purchase price of the fleet is 220 000. The running costs and scrap values of the fleet at the end of each year are: ex PIC Year 3 Year 4 Year 5 Year 1 110000 121 000 Year 2 132000 88 000 165000 55 000 176000 25 000 Running costs 154000 Scrap value 66 000 The supermarket's cost of capital is 12 per cent per annum. Ignore taxation and inflation. The supermarket should replace its fleet of delivery vehicles at the end of a year 1. b year 2. c year 3. d year 4. e year 5. (4 marks) CIMA Management Accounting - Decision Making