You have a 1993 Nissan that is expected to run for another three years, but you are considering buying a new Hyundai before the Nissan wears out. You will donate the Nissan to Goodwill when you buy the new car. The annual maintenance cost is $1,500 per year for the Nissan and $200 for the Hyundai. The price of your favorite Hyundai model is $18,000, and it is expected to run for 15 years. Your opportunity cost of capital is 3 percent. Ignore taxes.

\begin{tabular}{cc} Annual Maintenance Cost (Nissan): & $1,500 \\ \hline Remaining Service Life in Years (Nissan): & 3 \\ \hline Annual Maintenance Cost (Hyundai): & $200 \\ Purchase Price (Hyundai): & $18,000 \\ Remaining Service Life in Years (Hyundai): & 15 \\ Cost of Capital: & 3% \end{tabular} When should you buy the new Hyundai? Hint: Compare the alternatives based upon the equivalent annual cost (EAC) and choose the option with the lowest EAC. \begin{tabular}{|c|c|c|} \hline & \multicolumn{2}{|c|}{ Cash Flows } \\ \hline Year & Nissan \\ \hline & Hyundai \\ \hline 0 & \\ \hline 1 \\ \hline 2 \\ \hline 3 \\ \hline 4 \\ \hline 5 \\ \hline 6 \\ \hline 7 \\ \hline 8 \\ \hline 9 \\ \hline 10 \\ \hline 11 \\ \hline 12 \\ \hline 13 \\ \hline 14 \\ \hline 15 \\ \hline NPV (formula): \\ \hline (function): \\ \hline \end{tabular} EAC