Question
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
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:
- NC*=5
- AECC*= 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 (j0,1),(j,5)inf , then find the PV difference between that and the plan (j0,2),(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 |
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Fundamentals Of Financial Planning
Authors: Michael A Dalton, Joseph Gillice
3rd Edition
1936602091, 9781936602094
