The company is also carying our a review of its exiscing cir rental business. The company is deciding whether it should replace the cars that it uses after one, rwo or three years. The cars will not be leept longer than three yeurs due to the higher riakic of breildowns, The ectimared relevant cash flows for the three possible oprions for each car can be obrained from the following information: The company uses a cost of capital of 12 per cent for decisions of this cype. Reculised: (b) Calculate, using the annualized equivalene method, whecher the cars should be replaced after one, two or three years. You should ignore taxation and inflation. (c) Explain the limitarions of the annualized equivalent method for making decisions to replace non-current assess