Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 30

A recent environmental engineering graduate is trying to decide whether he should keep his presently owned car or purchase a more environmentally friendly hybrid. A new car will cost $26,000 and have annual operation and maintenance costs of $1200 per year with an $8000 salvage value in 5 years (which is its estimated economic service life).
The presently owned car has a resale value now of $5000; one year from now it will be $3000, two years from now $2500, and 3 years from now $2200. Its operating cost is expected to be $1900 this year, with costs increasing by $200 per year. The presently owned car will definitely not be kept longer than 3 more years. Assuming used cars like the one presently owned will always be available, should the presently owned car be sold now, 1 year from now, 2 years from now, or 3 years from now Use annual worth calculations at i = 10% per year and show your work.