A certain narrow-aisle forklift truck costs $10,000. When it is replaced, it will be replaced with a truck of the same kind. Operating costs for this truck are $1000 for the first year and increase at the rate of $150 per year squared thereafter. Technological improvements reduce operating costs by an estimated $100 per year. The salvage value of the trucks declines linearly over the nine-year life. The desired rate of return is to be 25 percent before taxes.

When should the equipment be replaced?