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?