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Problem 8-38 Replacement Decision (LO4) A forklift will last for only 2 more years. It costs $5,000 a year to maintain. For $20,000 you can
Problem 8-38 Replacement Decision (LO4) A forklift will last for only 2 more years. It costs $5,000 a year to maintain. For $20,000 you can buy a new lift that can last for 10 years and should require maintenance costs of only $2,000 a year. a. If the discount rate is 5% per year, should you replace the forklift? (Round your answers to the nearest whole dollar.) The equivalent annual cost (EAC) of the new machine The equivalent cost of owning and operating the new machine You (Click to select) replace. b. If the discount rate is 10% per year, should you replace the forklift? (Round your answers to the nearest whole dollar.) The equivalent annual cost (EAC) of the new machine The equivalent cost of owning and operating the new machine You (Click to select) replace. $ $
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