Mustang Auto Parts, Inc., is considering one of two forklift trucks for its assembly plant. Truck A

Question:

Mustang Auto Parts, Inc., is considering one of two forklift trucks for its assembly plant. Truck A costs $15,000 and requires $3,000 annually in operating expenses. It will have a $5,000 at the end of its three-year service life. Truck B costs $20,000, but requires only $2,000 annually in operating expenses; its service life is four years, at which time its expected will be $8,000. The firm's is 12%. Assuming that the trucks are needed for 12 years and that no significant changes are expected in the future price and functional capacity of each truck, select the most economical truck on the basis of AE analysis.
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