FIGURE 4.1 CONTINUED USE SPS SALVAGE VALUE that for degradation rates approaching 5 percent, the SPS system will not have an economic lifetime of 30 years. Since Rockwell International projects the degradation rate to be on the order of 0.5 percent per year, the present value of continued use of the SPS, referenced to the initial operation date, will be in excess of $6 billion (conditioned on the assumption that there are no sudden wearout failure modes). The notion of continued use can be expanded to verify estimates of salvage value obtained by direct estimation techniques, such as those employed in the sections above. This can be done by examining the decision to decommission an SPS satellite. At any point in time there are essentially five options: to continue operation of the satellite; to discontinue operation and dispose of the satellite; to discontinue operation, dispose of the satellite and replace it with a new satellite; to discontinue operation and salvage the satellite; or to discontinue operation,
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