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Use the following information for the next two questions. Defender: o Current salvage value = $8,000, decreasing at an annual rate of 1000$ from the

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Use the following information for the next two questions. Defender: o Current salvage value = $8,000, decreasing at an annual rate of 1000$ from the previous year's value o Required overhaul = $1,500 o O&M = $2,000 in year 1, increasing by 30% per year Challenger: o Nc-=5 AECc+= 5500 MARR=10% The PV of the optimal indefinite plan is within $50 of which of the following? Hint: this is a multi-step problem. To solve this, first you need to figure the AECD. and then you need to do marginal analysis to figure out the optimal amount of time to keep the defender. Once you've done that, chart out the indefinite plan in a cash- flow diagram, and then find its PV. Have fun! 53,272.25 O 53,372.25 53,472.25 53,572.25 None of the above Use the following information for the next two questions. Defender: o Current salvage value = $8,000, decreasing at an annual rate of 1000$ from the previous year's value o Required overhaul = $1,500 o O&M = $2,000 in year 1, increasing by 30% per year Challenger: o Nc-=5 AECc+= 5500 MARR=10% The PV of the optimal indefinite plan is within $50 of which of the following? Hint: this is a multi-step problem. To solve this, first you need to figure the AECD. and then you need to do marginal analysis to figure out the optimal amount of time to keep the defender. Once you've done that, chart out the indefinite plan in a cash- flow diagram, and then find its PV. Have fun! 53,272.25 O 53,372.25 53,472.25 53,572.25 None of the above

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