Question: thank you in advance SENSITIVITY ANALYSIS USING THREE ESTIMATES An engineer is evaluating three alternatives for new equipment at Emerson Electronics. She has made three
SENSITIVITY ANALYSIS USING THREE ESTIMATES An engineer is evaluating three alternatives for new equipment at Emerson Electronics. She has made three estimates for the salvage value, annual operating cost, and life. The estimates are presented on an alternative-by-alternative basis in the table below. For example, alternative B has pessimistic estimates of S - $500, AOC -$-4000, and n - 2 years. The first costs are known, so they have the same value. Perform a sensitivity analysis and determine the most economical alternative, using AW analysis at a MARR of 12% per year. First Cost $ Salvage Values $ AOC, Sper Year Lifen, Years 0 3 -20.000 -20,000 - 20.000 OD 11.000 9,000 -5.000 8 Strategy Alternative P Estimates ML O Alternative P Estimates ML O Alternative P Estimates ML -15.000 -15.000 -15.000 500 1.000 2.000 -4,000 -3.500 -2.000 2 4 7 -30,000 - 30,000 -30,000 3.000 3.000 3.000 -8.000 -7.000 -3.500 3 7 9 P = pessimistic: MI. most likely: O optimistic, SENSITIVITY ANALYSIS USING THREE ESTIMATES An engineer is evaluating three alternatives for new equipment at Emerson Electronics. She has made three estimates for the salvage value, annual operating cost, and life. The estimates are presented on an alternative-by-alternative basis in the table below. For example, alternative B has pessimistic estimates of S - $500, AOC -$-4000, and n - 2 years. The first costs are known, so they have the same value. Perform a sensitivity analysis and determine the most economical alternative, using AW analysis at a MARR of 12% per year. First Cost $ Salvage Values $ AOC, Sper Year Lifen, Years 0 3 -20.000 -20,000 - 20.000 OD 11.000 9,000 -5.000 8 Strategy Alternative P Estimates ML O Alternative P Estimates ML O Alternative P Estimates ML -15.000 -15.000 -15.000 500 1.000 2.000 -4,000 -3.500 -2.000 2 4 7 -30,000 - 30,000 -30,000 3.000 3.000 3.000 -8.000 -7.000 -3.500 3 7 9 P = pessimistic: MI. most likely: O optimistic
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