question 9 STAN BELDARK from study question bank – asset replacement

Stan Beldark is a wholesaler of lightweight traveling aids. His company employs a large number of sales representatives, each of whom is supplied with a company car. Each sales representative travels approximately 40.000 miles per annum visiting customers. Stan wishes to continue his present policy of always buying new cars for the sales representatives but wonders whether the present policy of replacing the cars every three years is optimal. He believes that keeping the cars longer than three years would result in unacceptable unreliability, and wishes to consider whether a replacement period of either one year of two years would be better than the present three year period. The company’s fleet of cars is due for replacement in the near future .

The cost of a new car at current price is $5.500. Resale values of used cars, which have travelled similar mileages to those of Stan’s firm, are $3.500 for a one-year-old car, $2.100 for a two-year-old car and $900 for a three-year-old car, all at current prices. Running costs at current prices, excluding depreciation, are as follows
road fund licence Fuel ,maintenance repairs
During first year of car’s life 300 3,000
During second year of car’s life 300 3.500
During third year of car’s life 300 4.300

Stan uses a discount rate of 10% when making such decision at this

Running cost and resale proceeds are paid or received on the last day of the year to which they relate , New cars acquired for use from the start of year 1 are purchased on the last day of the previous year

Required:
Prepare calculations for Stan Baldark showing whether he should replace the car of sales representatives every one, two or three years
Ignore taxation
Solution:
Running cost /PV of RC / Cum of PV of RC/Resale Value/PV of RV
Life 1 3.000 2727 2727 3500 3182
Life 2 3500 2891 5618 2100 1735
Life 3 4300 3229 8847 900 676

there is a solution in question bank, where they say NPV of a car in life 1 is 5,045
life 2 is 9,383
life 3 is 13,671
and I cant figure it out how did they came with those figures
and another thing is why they decide to discount resale values of cars when they say that it is a current price of a car , I presume that value of a car is going to be higher in future and when we discount it we would be still going to get the current (given) prices

Hope you can give me some explanation

thank you