A commercial vehicle is purchased for an acquisition cost of $300,000. The operating and maintenance costs (O&M) and trade in values in years 1,2, 3 and 4 of the life of the vehicle are shown in the Table. Calculate the economic life (the time when you should replace the vehicle to achieve lower cost/ year of ownership) and theequivalent annual costfor this replacement policy. Use discounted costs and a discount rate of 15%

Year	1	2	3	4
O&M costs ($)	30000	45000	65000	117500
Trade in value ($)	235000	190000	160000	127500