The W terminal is a tachometer pickup, used on a lot of diesels. The alternator you have from advance does not look like it is correct for the 240D.

I've had a local alternator shop quote me $25 to install a W terminal on my 240D alternator, which I would prefer over the stock tach pickup.

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Milan Brown 1979 240D, rebuilt OM617.952 turbo diesel, rebuilt 722.315 transmission (my only daily driver)

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