Kunura Fleet Ltd operates a fleet of limousines. It is currently considering replacing them with a new model. A decision must be made to replace the old limousines with new now or alternatively at the end of the physical life of the old limousines in 4 years. The required rate of return is 9%. The company plans to evaluate options based on the following information for each vehicle replaced: Item Old Limousines New Limousines Net cash flows $40,000 p.a. $70,000 p.a. Cost - $300,000 Estimated Life 4 years 7 years Disposal Value: at present $20,000 Disposal Value: in 7 years - $40,000 Required rate of return (real) 9% p.a. 9% p.a. Should Luxury Fleet replace the old limousines now or later?