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Calculate equivalent cost of owning and operating forklift

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Question - A forklift will last for only 2 more years. It costs $6,600 a year to maintain. For $21,000 you can buy a new lift that can last for 10 years and should require maintenance costs of only $3,600 a year.

a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 6% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

a-2. Should you replace the forklift?

b-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 15% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b-2. Should you replace the forklift?

Reference no: EM133004274

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