3. Engineering Economics a) Decide between the following 2 alternatives for coating the outside of a...

 

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3. Engineering Economics a) Decide between the following 2 alternatives for coating the outside of a shipping container. Report the net present value of the costs for each. The discount rate is 8%, and the container is expected to survive for 12 years, with no scrap value at the end. Use an epoxy-based coating, which costs $7,000. It only needs to be applied once when the container is first manufactured. Use a standard acrylic paint which costs $4,500 per application. This must be applied to the product initially, and it only has a short useful life, so it must be reapplied after 6 years. b) You must make annual payments to pay off a loan you took to build a drawbridge. The annual payment is $125,000, and you must pay for 30 years. If the interest rate is 5%, what was the original loan amount? - - c) You are considering buying an injection molding machine. It has a lifespan of 10 years and a scrap value of $110,000 at the end of 10 years. You expect it to generate $60,000 in revenue every year. With a discount rate of 16%, what would you need to pay for this machine to have a net present value of $0? 3. Engineering Economics a) Decide between the following 2 alternatives for coating the outside of a shipping container. Report the net present value of the costs for each. The discount rate is 8%, and the container is expected to survive for 12 years, with no scrap value at the end. Use an epoxy-based coating, which costs $7,000. It only needs to be applied once when the container is first manufactured. Use a standard acrylic paint which costs $4,500 per application. This must be applied to the product initially, and it only has a short useful life, so it must be reapplied after 6 years. b) You must make annual payments to pay off a loan you took to build a drawbridge. The annual payment is $125,000, and you must pay for 30 years. If the interest rate is 5%, what was the original loan amount? - - c) You are considering buying an injection molding machine. It has a lifespan of 10 years and a scrap value of $110,000 at the end of 10 years. You expect it to generate $60,000 in revenue every year. With a discount rate of 16%, what would you need to pay for this machine to have a net present value of $0?

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Answer a The net present value of the epoxybased coating is 7000 Th... View the full answer