The AW of the current process to make motion controllers is $–62,000 per year. A replacement process under consideration has estimates of P = $64,000, AOC = $38,000, and n = 3 years. Three engineers have given their opinions about what the salvage value of the new process may be in 3 years as $10,000, $14,500, and $18,000.

(a) Is the decision to replace the process sensitive to the salvage value estimates at a MARR of 15% per year?

(b) If sensitive, what is the lowest salvage value that justifies the replacement process?