Question
A forklift will last for only 3 more years. It costs $6,700 a year to maintain. For $22,000 you can buy a new lift that
A forklift will last for only 3 more years. It costs $6,700 a year to maintain. For $22,000 you can buy a new lift that can last for 12 years and should require maintenance costs of only $3,700 a year.
a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 5% per year. (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 12% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b-2. Should you replace the forklift?
A forklift will last for only 3 more years. It costs $6,700 a year to maintain. For $22,000 you can buy a new lift that can last for 12 years and should require maintenance costs of only $3,700 a year.
a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 5% per year. (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 12% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b-2. Should you replace the forklift?
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Quality Auditing A Tool For Excellence
Authors: David Mills, J. Mills
1st Edition
041245890X, 978-0412458903
