Problem 18.004 DEPENDENT MULTI-PART PROBLEM - ASSIGN ALL PARTS

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 predicted what the salvage value of the new process may be in 3 years: $10,000, $14,500, and $18,000.

Problem 18.004.b: Determine the SV for which, you are indifferent between the current option and the new replacement

If sensitive, what is the lowest salvage value that justifies the replacement process (MARR of 15% per year)?