Consider a new electric forklift truck that would cost $18,000, have operating costs of $1,000 in the first year, and have a salvage value of $10,000 at the end of the first year. For the remaining years, operating costs increase each year by 15% over the previous year’s operating costs. Similarly, the salvage value declines each year by 25% from the previous year’s salvage value. The truck has a maximum life of seven years. Overhauls costing $3,000 and $4,500 will be required during the fifth and seventh years of service, respectively. The firm’s required rate of return is 15%. Find the economic service life of this new machine.