Question Completion Status: > A Moving to the next question prevents changes to this answer. Question 9 of 14 estion 9 9 points Saved Wayward Warehousing The company is a commercial storage facility for dry goods. The company warehouses finished goods on a monthly basis for a variety of customers. One of the materials handling forklifts was purchased five years ago. The forklift is no longer covered by the supplier's warranty. The purchase price was $10,000 plus a one-time delivery and preparation cost of $500. The expected economic life of the machine was 10 years. These types of machines have no expected salvage value at end of life. The forklift has had mechanical issues since acquisition that results in machine downtime. Downtime impacts the timing of loading and unloading, meeting delivery deadlines and results in overtime. Service calls and maintenance parts is currently averaging $300 per month. There is a reconditioned used forklift available that won't have the same mechanical issue and downtime. There is a two year limited warranty on the reconditioned forklift The maintenance costs on the used machine are expected to be 60% of the current amount. The used machine's purchase price is $8,000 with a one-time delivery and preparation cost of $200. The machine has an expected economic life of 5 years. The equipment supplier is offering a 10% trade-in on the old forklift based on its original purchase price. The company is trying to decide whether to replace the forklift. The company uses a 5 year time frame to evaluate these types of operational business decisions. Ignore inflation and the time value of money for this evaluation. Required 1. What are the relevant costs to consider? What is the expected 5-year total cost of keeping the existing forklift versus replacing it with the used forklift? 2. What would be your recommendation on replacing the forklift? Provide two strategic reasons or factors that support your recommendation, Input the following before moving on to the next question. 1. Five year total cost of a) existing forklift and b) used forklift. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BI U S Paragraph Arial A TIL TX 14px 6 % OU Q 1 I ENG 3:28 PM 2021-02-23 O Type here to search