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Consider the following information for an industrial forklift. It has a current trade-in value of $7000 however if kept it requires an immediate overhaul costing

Consider the following information for an industrial forklift. It has a current trade-in value of $7000 however if kept it requires an immediate overhaul costing $500. The operating and maintenance costs are $2000 in the first year and they are expected to increase by $2000 per year thereafter.

The machine has a maximum lifespan of 6 years from today. The resale value of the machine will fall by 50% each year from its previous year's resale price. What is the AEC of the machine at its economic service life? Assume the firm has a MARR of 11%. The AEC is within $20 of?

Question 13 options:

 6338 6378 6418 6458 6498 None of the above 

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