Year 1 2 3 4 5 Operating Expense $3,000 $3,000 $3,500 $4,000 $4,500 The salvage (market) values of the forklift are also reasonably well known as a function of age: Year 1 2 3 4 5 Salvage Value $6,000 $5,000 $4,000 $2,500 $1,250
Year 1 2 3 4 5 Operating Expense $3,000 $3,000 $3,500 $4,000 $4,500 The salvage (market) values of the forklift are also reasonably well known as a function of age: Year 1 2 3 4 5 Salvage Value $6,000 $5,000 $4,000 $2,500 $1,250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 $8,000 each. Records of operation and maintenance indicate these average expenses per year as a function of age of the vehicle: Find the best time to replace a forklift truck when the MARR = 15% per year.
Transcribed Image Text:Year
1 2 3 4 5
Operating Expense $3,000 $3,000 $3,500 $4,000 $4,500
The salvage (market) values of the forklift are also
reasonably well known as a function of age:
Year
1
2
3
4
5
Salvage Value $6,000 $5,000 $4,000 $2,500 $1,250
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