Question: 9. Aldi must choose between an electric-powered (Project A) and a gas-powered (Project B) forklift truck for moving materials in its factory. Since both forklifts

9. Aldi must choose between an electric-powered (Project A) and a gas-powered (Project B) forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one (mutually exclusive investments). The electric- powered truck will cost more, but it will be less expensive to operate; it will cost $22,000, whereas the gas-powered truck will cost $17,500. The cost of capital that applies to both investments is 12 percent. The life for each type of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,290 per year and those for the gas-powered truck will be $5,000 per year. Annual net cash flows include depreciation expenses. Which project should be chosen? (5 points)

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