80.2K

Verified Solution

Link Copied!

Problem 8-38 Replacement Decision (LO5) A forklift will last for only 3 more years. It costs $6,400 a year to maintain. For $19,000 you can buy a new lift that can last for 10 years and should require maintenance costs of only $3,400 a year. a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 5% per year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a-2. Should you replace the forklift? b-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 13% per year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b-2. Should you replace the forklift? a-1. Equivalent cost a-2. Should you replace the forklift? b-1. Equivalent cost b-2. Should you replace the forklift? Yes Yes

Problem 8-38 Replacement Decision (LO5) A forklift will last for only 3 more years It costs $6,400 a year to maintain For $19,000 you can buy a new lift that can last for 10 years and should require maintenance costs of only $3,400 a year. a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 5% per year Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a-2. Should you replace the forklift? b-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 13% per year Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b.2. Should you replace the forklift? Problem 8-38 Replacement Decision (LO5) A forkift will last for only 3 more years. It costs $6,400 a year to maintain. For $19,000 you can buy a new lift that can last for 10 years and should require mantenance costs of only $3.400 a year: a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 5% per year Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a-2. Should you replace the forklift? b-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 13\% per year Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b.2. Should you replace the forklif

Answer & Explanation Solved by verified expert

See Answer