The PW of the ATCFs through year k, FWk, for a defender (three-year remaining useful life) and

Question:

The PW of the ATCFs through year k, FWk, for a defender (three-year remaining useful life) and a challenger (five-year useful life) are given in the following table:

Assume the after-tax MARR is 12% per year. On the basis of this information, answer the following questions:
a. What are the economic life and the related minimum EUAC when k = N*AT, for both the defender and the challenger?
b. When should the challenger (based on the present analysis) replace the defender? Why?
c. What assumption(s) have you made in answering Part(b)?

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...