What is the optimal life of the forklift

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A 2000-pound, counter-balanced, propane forklift can be purchased for $30,000. Due to the intended service use, the forklift's market value drops 20% of its prior year's value in year 1 and year 2 and then declines by 15% until year 10, when it will have a scrap/market value of $3000. Maintenance of the forklift is $400 per year during years 1 and 2 while the warranty is in place. In year 3, it jumps to $750 and increases $200 per year thereafter. What is the optimal life of the forklift? (i = 10%)

Reference no: EM131809952

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