erv_weibull

The expected residual value of an asset with Weibull survival function $$S(t) = \exp\Big[-\Big(\frac{t}{\lambda}\Big)^{\beta}\Big]$$ conditional on its current age.

erv_weibull(lifetime, beta, system_age, r)

Arguments

lifetime

mean system lifetime

beta

weibull shape parameter (usually > 1)

system_age

vector of system ages

r

discount rate

Value

vector of ervs

Details

The continuous time discount rate is related to the annual rate \(\delta\) by $$r=log(1+\delta)$$