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A manufacturer moves pallets of materials with a forklift truck. He has consistently used the same make and model of forklift over the past several years. The purchase price has been relatively constant at

$8 comma 0008,000

each. Records of operation and maintenance indicate these average expenses per year as a function of age of the vehicle. The salvage (market) values of the forklift are also reasonably well known as a function of age. Find the best time to replace a forklift truck when the

MARRequals=1010%

per year.

Year Operating Expense $2,000 $2,000 $2,500 $3,000 $3,500 Year Salvage Value $5,000 $4,000 $3,000 $1,500 $250 To Find F Given P To Find A Given F 2 F/P A/F To Find P Given F P/F 0.9091 0.8264 0.7513 0.6830 0.6209 1.1000 1.2100 1.3310 1.4641 1.6105 To Find F Given A FIA 1.0000 2.1000 3.3100 4.6410 6.1051 To Find P Given A PIA 0.9091 1.7355 2.4869 3.1699 3.7908 To Find A Given P A/P 1.1000 0.5762 0.4021 0.3155 0.2638 1.0000 0.4762 0.3021 0.2155 0.1638 1.7716 1.9487 2.1436 2.3579 2.5937 0.5645 10.5132 10.4665 0.4241 10.3855 7.7156 9.4872 11.4359 13.5795 15.9374 4.3553 4.8684 5.3349 5.7590 16.1446 0.1296 0.1054 0.0874 0.0736 0.0627 0.2296 0.2054 0.1874 0.1736 10.1627