1. An industrial lift truck has been in service for several years and management is contemplating to replace it. A replacement candidate, truck A is under consideration. If new truck A is purchased, the old lift truck has an actual market value of $3,000. A planning horizon of 5 years is to be used. If the defender (current lift truck) is retained, it is anticipated to have annual operating and maintenance cost of $6,500; it will have a zero market value at the end of 5 additional years of service. Lift truck A will cost $14,000 and will have operation and maintenance cost of $3,800; at the end of planning horizon it will have a market value of 3,500 . Determine if the current truck should be kept or replaced with the new truck A with the cash flow approach using i=15% HINT: Draw the cash flow diagrams for each case