Your brother attends in a University and expects to graduate this coming May. He has a job in Washington that pays USD 400,000 per year waiting for him, and he must report to work on June 15, 2021. He has no other job offers available to him. A potentially tricky decision faces your brother because he owns a small USD 400,000 house in Seattle, and the housing market is in the doldrums. Two years ago when he purchased the house, he made a USD 40,000 cash payment on it. He continues to make USD 3,100 per month mortgage payments. 

Your brother prefers not to rent the house because of all the headaches involved. His realtor in Seattle says the house can be sold for USD 340,000 immediately. If your brother wants at least USD 400,000 for the house, the realtor says it probably won't sell for another 15-18 months. The cost of moving to Washington is estimated to be USD 50,000 if your brother uses professional movers. However, he can pack and move himself for USD 20,000. Also he plans to rent an apartment in Washington for USD 6,000 per month. He has a pet cat that is named "Violet," and your brother will take his cat to Washington in June. 

 

What should your brother do? 

 

Give him advice by using each of the seven principles of engineering economy.

 

1. Develop the Alternatives;

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2. Focus on the Differences;

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3. Use a Consistent Viewpoint;

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4. Use a Common Unit of Measure;

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5. Consider All Relevant Criteria;

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6. Make Uncertainty Explicit;

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7. Revisit Your Decisions

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2.) Watch this YouTube video about economy. Any thoughts or opinion about it, learning and possible ideas and questions formed in your minds after watching?

 

Link: https://www.youtube.com/watch?v=g9aDizJpd_s

Answer rating: 100% (QA)

Here is my analysis of your brothers situation based on the seven principles of engineering economy ... View the full answer