the annual O&M cost is $1900.80
The warehouse manager is considering the following two options: keep the green forklift or replace it with a new forklift. The current green forklift was purchased 3 years ago for $20,000. The O&M costs that you estimated in part 1 are expected to increase by $800 in each subsequent year. In 10 years, the green forklift can be sold for $2,000. A new forklift can be purchased for $26,000. If purchased, the old forklift can be sold for $16,500. The O&M cost for the new forklift during its first year of operation is expected to be 80% of the O&M cost for the current forklift (estimated in part 1). After that, the O&M costs are expected to increase $500 per year. In 10 years, it is estimated that the new forklift can be sold for a salvage value of $5,500. Given that the company uses a 15% MARR and a 10-year planning horizon, you are asked to perform an economic comparison of these two options and recommend if the warehouse should keep the green forklift or purchase a new forklift. The warehouse manager is considering the following two options: keep the green forklift or replace it with a new forklift. The current green forklift was purchased 3 years ago for $20,000. The O&M costs that you estimated in part 1 are expected to increase by $800 in each subsequent year. In 10 years, the green forklift can be sold for $2,000. A new forklift can be purchased for $26,000. If purchased, the old forklift can be sold for $16,500. The O&M cost for the new forklift during its first year of operation is expected to be 80% of the O&M cost for the current forklift (estimated in part 1). After that, the O&M costs are expected to increase $500 per year. In 10 years, it is estimated that the new forklift can be sold for a salvage value of $5,500. Given that the company uses a 15% MARR and a 10-year planning horizon, you are asked to perform an economic comparison of these two options and recommend if the warehouse should keep the green forklift or purchase a new forklift