Show full solution, Do not use Excel Spreadsheet, Draw cashflow diagrams where applicable

4. It has been studied that the market value of a brand new Hyundai Accent declines by 20% per year. When the car is 4 years old (end of year 4), the decline rate increases to 22% per year and remains constant for the rest of the car's life. As you see in the given table, annual maintenance costs also increase as the car gets older. The new Hyundai Accent you are in love with, costs $15,400 in total, today. Question: Should you buy the car 'new or used' if the only thing that matters to you is the total cost of ownership? When should you buy the car, and for how long should you keep it? You can ignore the effect of forgone interest cost in this problem. (10 Marks) Car's age (Years) Annual Maintenance (s) 150 220 235 1 2 3 4 5 6 7 8 99 288 593 888 1111