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Sara has graduated from HS and her parents have given her a car fund of $21,000 to help purchase and maintain a 3 year old

Sara has graduated from HS and her parents have given her a car fund of $21,000 to help purchase and maintain a 3 year old car in college. Because of maintenance costs, her parents tell her that she may trade in her car for another 3 year old car (at a cost of $12000), one or more times during the next 3 summers if she determines that it will minimize her overall costs. They also tell her that in 4 years they will buy her a new car as a college graduation present so she should definitely plan on trading in the car then. Yearly operational and maintenance cost are provided below. Formulate the problem as a minimum flow network problem and then solve it using excel.

Operating and Maintenance Costs

for Ownership Year

Trade in Values at End

of Ownership Year

Car Purchase Price

1

2

3

4

1

2

3

4

$12,000

$2000

$3000

$4500

$6500

$8500

$6500

$4500

$3000

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