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The Rainbow Tavern in Maupin is considering purchasing a 4,000-pound forklift truck, which will be used primarily for processing incoming as well as outgoing kegs.
The Rainbow Tavern in Maupin is considering purchasing a 4,000-pound forklift truck, which will be used primarily for processing incoming as well as outgoing kegs. The forklift is fueled by propane. The purchase cost as well as annual operating and maintenance cost are provided below. Annual fuel and maintenance costs are measured in terms of number of shifts per year, where one shift is equivalent to 8 hours of operation. The Rainbow is unsure of the number of shifts per year, but it expects it should be somewhere between 200 and 260 shifts. The Rainbow uses a MARR of 10% per year as an interest rate compounded annually for project evaluations. Determine sensitivity results for the net present worth of the new forklift truck versus number of shifts per year for a base case of 230 shifts with a worst case of 260 shifts and a best case of 200 shifts
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