Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

A consulting aerospace engineer at Aerospatial estimated AW values for a present

ID: 1205895 • Letter: A

Question

A consulting aerospace engineer at Aerospatial estimated AW values for a presently owned, highly accurate steel rivet inserter based on company records of similar equipment.

If Retained This

AW Value,

Number of Years

$/Year

1

–62,000

2

–50,000

3

–47,000

4

–53,000

5

–70,000

A challenger has ESL = 2 years and AWC = $-49,000 per year. If the consultant must recommend a replace/retain decision today, should the company purchase the challenger? The MARR is 15% per year.

a.Recommendation now is to replace the defender for the challenger now.

b.Recommendation now is to retain the defender for 3 years, then replace.

c.Recommendation now is to retain the defender for 4 years, then replace.

d.Do nothing for 5 years.

If Retained This

AW Value,

Number of Years

$/Year

1

–62,000

2

–50,000

3

–47,000

4

–53,000

5

–70,000

Explanation / Answer

When we see the npv, immediately replacing the defender seems to be approprtiate.

Year 0 1 2 3 4 5 Amount 0 62000 50000 47000 53000 70000 NPV 0 53913.04 37807.18 30903.26 30302.92 34802.37 187728.8 Year 0 1 2 3 4 5 Amount 0 49000 49000 49000 49000 49000 NPV 0 42608.7 37051.04 32218.3 28015.91 24361.66 164255.6
Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote