Use the following information. Defender: Current salvage value = $8,000, decreasing at an annual rate of 1000$ from the previous year’s value Required overhaul = $1,500 O&M = $2,000 in year 1,...

Use the following information.

Defender:
- Current salvage value = $8,000, decreasing at an annual rate of 1000$ from the previous year’s value
- Required overhaul = $1,500
- O&M = $2,000 in year 1, increasing by 30% per year

Challenger:
- N_C*=5
- AEC_C*= 5500

MARR=10%

Find the loss in PV from mistakenly keeping the defender one year longer than is optimal. So in other words, if you found that the optimal indefinite plan was (j_0,1),(j,5)_inf , then find the PV difference between that and the plan (j_0,2),(j,5)_inf. The PV difference is within $10 of:

	269.11
	289.11
	309.11
	329.11
	None of the above

Jun 06, 2022

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Use the following information. Defender: Current salvage value = $8,000, decreasing at an annual rate of 1000$ from the previous year’s value Required overhaul = $1,500 O&M = $2,000 in year 1,...

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