This scenario relates to three requirements.

AgeAid is a charity which provides a number of services for the elderly, including day centres where they can attend and participate in various activities. AgeAid is funded by donations, government grants, legacies and surpluses from the shops which it runs. Its services are mostly provided by volunteers.

AgeAid is planning to introduce a scheme providing regular hot lunches to be delivered to participants' homes. To do this, it will need to invest in specially adapted vehicles. The charity's trustees are currently considering whether to buy or lease these vehicles.

As a charity, AgeAid is exempt from tax and therefore cannot claim for tax$-$allowable depreciation.

Buy

The vehicles could be bought immediately for $$300,000.$ Maintenance costs are forecast to be $$12,000$ in year $1,$ increasing by the following rates in subsequent years:

$\backslash$table$[[$Year$,2,3,4],[$Increase in maintenance costs,$20\%,30\%,40\%$