# Disposal and Recycle Economic Assessment for Aircraft and Engine End of Life Solution Evaluation
## 4 Cost and Value Evaluation
### Salvage, Valorization, and Residual Value Evaluation  
The aircraft value involved in the D&R process generally relates to the residual, salvage, and valorization values, which will influence the disposal and recycle strategies. They are irrelevant to the stakeholders, while tightly linked to the specific D&R processes, and to the end reusable or recycled product. Aircraft residual value is the aircraft value after a certain period of depreciation. It is determined by the airline based on its depreciation strategy and the duration of depreciation [45]. The residual value at the year for disposal and recycle can be calculated by Equation (6). If the (\(FY-FY_{0}\)) is just  
Figure 3: Disposal and recycle Cost Breakdown Structure (CBS). the total depreciation period \(n_{depreciation}\), then we will have \(V_{residual}=0\). Residual value can also be estimated via purchase price, as in Equation (7). \[V_{residual}=P_{AC}(1+I)^{FY-FY_{0}}-C_{depreciation}=\frac{P_{AC}}{n_{depreciation }}\Big{(}(1+I)^{FY-FY_{0}}n_{depreciation}-(1+I)^{n_{depreciation}}(FY-FY_{0}) \Big{)}, \tag{6}\]  
\[V_{residual}=r_{residual}P_{AC}, \tag{7}\]  
\[r_{residual}=\frac{(1+I)^{FY-FY_{0}}n_{depreciation}-(1+I)^{n_{depreciation }}(FY-FY_{0})}{n_{depreciation}}, \tag{8}\]  
where \(I\) is the inflation rate, and \(r_{residual}\) is residual rate. According to Equations (6) and (7), we can derive the expression of \(r_{residual}\) with Equation (8). The salvage value (\(V_{salvage}\)) is the estimated aircraft (or component) value after the D&R process. It is extracted from the reused and recycled or resold aircraft or components and materials. It is considered to be the value of the aircraft or aircraft component, including the valorization according to the D&R process. Similar terms, such as the part harvested value or the component market value, are also utilized in previous studies [2,41]. According to the present value theory, the present value (\(PV\)) is the discounted future value (\(FV\)) by a given rate of return (\(r\)) in a period (\(n\)), as shown in Equation (9). In the context of aircraft disposal and recycle process, the salvage value corresponds to the future value of the aircraft after the D&R process, while the residual value is just the present value of the aircraft in the current condition before the D&R process. Based on the relationship between \(FV\) and \(PV\), the link between salvage value and residual value can be formulated as in Equation (10). Therefore, once the rate of return is given, the salvage value can be obtained through Equation (11). Depending on the actual D&R process step, detailed salvage value may contain the following value items: the value of the components for reuse and alternative reuse, the value of energy recovery, the value of recycling the high and low quality material, and the value of the other resale parts or the value of the aircraft resale (see Equation (12) and Figure 2). The salvage value for land filling is deemed as zero. \[PV=\frac{FV}{(1+r)^{n}}, \tag{9}\]  
\[V_{residual}=\frac{V_{salvage}}{(1+r_{D\&R})^{n_{D\&R}}}, \tag{10}\]  
\[V_{salvage}=V_{residual}(1+r_{D\&R})^{n_{D\&R}}, \tag{11}\]  
\[V_{salvage}=V_{component\_reuse}+V_{component\_alter\_reuse}+V_{energy\_rcv }+V_{material\_hq}+V_{material\_l\_q}+V_{resale}, \tag{12}\]  
where \(r_{D\&R}\) is the rate of return for the D&R process, which is the interest the D&R process might earn, \(n_{D\&R}\) is the period of disposal and recycle process, and it is equivalent to the duration of the D&R process. The subscripts in Equation (12) correlate to the aforementioned process steps. Note that, in the current research presented, the salvage cost concept, which is the cost spent to salvage an aircraft and aggregation of the process step cost specifically for product salvage (e.g., reuse, material recycle, etc. ), is different and not interchangeable with the salvage value. Valorization value (\(V_{valorization}\)) is the product value added after the aircraft disposal and recycle process.