1. 9.13 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 ELS = 2 years and AWC = $−48,000 per year. The MARR is 15% per year.

(a) If the consultant must recommend a replace/retain decision today, should the company keep the defender or purchase the challenger? Why?

(b) When should the next replacement evaluation take place, and under what assumption?Page 296 Table Summary: A table divided into 2 columns shows the AW values for a highly accurate steel rivet inserter for 5 years. The column headers are: column 1, If retained this number of years; column 2, The AW value is, dollars per year.

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