Based on company records of similar equipment, a consulting aerospace engineer at Aerospatiale estimated AW values for a presently owned, highly accurate steel rivet inserter as shown. A challenger has ESL = 2 years and AWC= $−41,300 per year. The MARR is 12% per year.If Retained ThisNumber of YearsThe AW Value Is,$ per Year1−62,0002−51,0003−49,0004−53,0005−70,000 When should the next replacement evaluation take place, and under what assumption?The next replacement evaluation should take place in (Click to select) 4 2 3 5 years, and under the assumption that the (Click to select) defender challenger estimates do not change.

In this technique of comparison, the cash flows of each alternative will be decreased to time zero…

Answered: Based on company records of similar…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Based on company records of similar equipment, a consulting aerospace engineer at Aerospatiale estimated AW values for a presently owned, highly accurate steel rivet inserter as shown. A challenger has ESL = 2 years and AW_C= $−41,300 per year. The MARR is 12% per year.

If Retained This Number of Years	The AW Value Is, $ per Year
1	−62,000
2	−51,000
3	−49,000
4	−53,000
5	−70,000

When should the next replacement evaluation take place, and under what assumption?

The next replacement evaluation should take place in (Click to select) 4 2 3 5 years, and under the assumption that the (Click to select) defender challenger estimates do not change.

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