What is the optimal life of the forklift

Assignment Help Business Economics

Reference no: EM131810501

A 2000-pound, counterbalanced, 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 Years 1 and 2 and then declines by 15% until Year 10 when it will have a scrap/market value of $1000. 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?

Reference no: EM131810501

Questions Cloud

Analysis of the financial activities and accounting position : Analysis of the financial activities and accounting position of a major non-American corporation

What life of this machinery has the lowest euac : Based on a 15% before-tax MARR, what life of this machinery has the lowest EUAC?

How you would find the most economical useful life : Develop an expression to show how you would find the most economical useful life of this machine on a before-tax basis. Contributed by D. P. Loucks, Cornell Uni

Create a list of information assets that you personally own : Create a list of information assets that you personally own; Then, what are some of the ways you protect your information assets?

What is the optimal life of the forklift : In Year 3 it jumps to $750 and increases $200 per year thereafter. What is the optimal life of the forklift?

What is the present value of a perpetual stream of cash flow : What is the present value of a perpetual stream of cash flows that pays $80,000 at the end of one year and grows at a rate

What is the optimal ownership policy : In Year 3 it jumps to $600 and increases $50 per year thereafter. What is the optimal ownership policy?

What is the most important quality of a good leader and why : What is the most important quality of a 'good leader' and Why? Honest - wise leaders are not afraid of communicating the truth to their people

Find the break-even quantity : If the requirement is 150,000 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper ?

User Account

All Pages