Use the following information for the next two questions.

• Defender:
  • Current salvage value = $8,000, decreasing at an annual rate of 1000$ from the previous years 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:

options:

A	309.11
B	289.11
C	269.11
D	None of the above
E	329.11