AM Auto Sdn Bhd provides rental cars services in Malacca area. Currently, the company has a fleet of 10 rental cars which they intend to replace in a near future. The cost of each rental car is RM40,000. The trade-in value of each car is RM25,000 in ro Year 1 and this decreases by 20% per year subsequently. Servicing and parts cost is RM6,500 per rental car in the first year and this cost is expected to rise by 15% per year as each vehicle grows older. The cost of cleaning the interior and exterior of each rental car in order to keep it up to the quality required by the customers is RM1,500 per car in the first year and this cost is estimated to increase by 10% in Year 2. In Year 3, the cleaning cost for each rental car will be RM2,500. AM Auto Sdn Bhd has a cost of capital of 12%. Taxation is to be ignored. Required: i. Using the equivalent annual cost method, determine whether AM Auto Sdn Bhd should replace its fleet of cars after one year, two years or three years. S ar SI