Chatham Automotive purchased new electric forklifts to move steel automobile parts two years ago. They cost

$75,000 each, including the charging stand. Inpractice, it was found that they did not hold a charge as long as claimed by themanufacturer, so operating costs are very high. As aresult, their current salvage value is about $9,000. Chatham is considering replacing them with propane models. New propane forklifts cost $58,000 each. After oneyear, they have a salvage value of $40,000, and thereafter decline in value at adeclining-balance depreciation rate of 20 percent, as does the electric model from this time on. The MARR is 7 percent. Operating costs for the electric model will be

$20,000 thisyear, rising by 13 percent per year. Operating costs for the propane model will initially be $11,000 over the firstyear, rising by 13 percent per year. Should Chatham Automotive replace the forkliftsnow?