NO SPREADSHEET SOLUTION ALLOWD, ALL WORK MUST BE DONE BY HASND, READ CAREFULLY. A moving company is considering replacing one of their large moving vans. A new van will cost $50,000 and last for 7 years. It will have an estimated annual maintenance cost of $2,000 the first year, increasing by $1,000 per year thereafter with a resale value of $15,000 in 7 years. If the currently owned van is retained, the expected market values and annual maintenance costs are listed below in the table. The company will not consider keeping the van for more than an additional 3 years, at which time it anticipates a $10,000 trade in value. Use a discount rate of 15% per year. When should the company purchase a new van? You MUST use the "one year at a time" process (flow chart). Draw cash flow diagrams. (TIPS: Compute EUAW for new machine. Compute first year and second year costs for old machine.compute EUAW for remaining life of old machine. Compare.)

Additional Years Kept	Annual Maintenance Cost	Current Market Value
1	$5,000	$17,000
2	$6,000	$15,000
3	$6,000	$13,000