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cost Problems 4. 7 points) Al Gurg Enterprises operates numerous forkits in ts logistice businesn st variovan ortsIt is considering replacing several forklifts purchased at
cost Problems 4. 7 points) Al Gurg Enterprises operates numerous forkits in ts logistice businesn st variovan ortsIt is considering replacing several forklifts purchased at acost of e about 3 years ago. New forklifts will cost 28 million euros (you can lonor calculations). cont of 18 on ero miltions in a Estimated operating costs per year are 12 million euros per year tor the next sis years for the existing. or older forklifts Operating costs are 8 miltion euros per year for the nexte for the new forklifts. If sold now, existing forklifts could be sold for 8 miltion euros, In sN years the old forklifts have zero residual value, while the newer forklifts would then have a residual value of 4 million euros Set this problem up any way you wish. Figure out which costs are relevant, and which are not, and make the decision regarding whether to keep old forklifts or replace them with new forklifts. The relevant timeframe for costs is the next six years and time value of money is ignored (meaning a zero-discount rate, if you want to relate this problem to your tinance courses) Show work and determine whether to keep or replace the old forklifts
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