A construction manager just starting in private practice needs a van to carry cr

Question

A construction manager just starting in private practice needs a van to carry crew and equipment. She can lease a used van for $3789 per year, paid at the beginning of each year, in which case maintenance is provied. Alternatively, she can buy a used van for $6052 and pay for maintenance herself. She expects to keep the van for three years at which time she could sell it for $1145. What is the most she should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it, if her MARR is 20%?

Enter your answer as follow: 123456

Please NO EXCEL- and show me what eqations you are using to get any numbers and how I go about plugging things in! THANK YOU !!!

Explanation / Answer

leased value for three years = annuity value of three years paid at begining*$ 3789@ 20%

=(1+0.8333+0.69444)*$3789

=2.5277*3789

=$ 9577.74

total present value of cost excluding maintanence = $ 6052+$ 1145*0.5787

=$ 6052-$662.62=$5389.48

present value of three years maintance = $ 9577.74-$ 5389.48= $ 4188.25

annual value = $ 4188.25/2.106= $ 1,988.74

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