Prognostics and Health Management (PHM) provides the potential to lower sustainment costs, to improve maintenance decision-making, and to provide product usage feedback into the product design and validation process. A case analysis was developed using a discrete event simulation to determine the benefits and the potential cost avoidance resulting from the use of PHM in avionics. The model allows for variability in implementation costs, operational profile, false alarms, random failure rates, and system composition to enable a comprehensive calculation of the Return on Investment (ROI) in support of acquisition decision making. The case analysis compared the life cycle costs using unscheduled maintenance to the life cycle costs using two types of PHM approaches.