Determine which nanoparticle type the company should select

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Reference no: EM13881999

The manager of Liquid Sleeve, Inc., a company that makes a sealing solution for machine shaft surfaces that have been compromised by abrasion, high pressures, or inadequate lubrication, is considering adding metal-based nanoparticles of either type Al or Fe to its solution to increase the product's performance at high temperatures. The costs associated with each are shown below. The company's MARR is 20% per year. Do the following using a PW-based rate of return analysis and a spreadsheet:

(a) Determine which nanoparticle type the company should select using the _i * value.

(b) On the same graph, plot the PW versus different i values for each alternative. Indicate the breakeven i * value and the MARR value on the plot.

(c) Use the plot of PW versus _i values to select the better alternative with MARR _ 20% per year. Is the answer the same as in part ( a )?

 

Type Fe

Type Al

First cost, $

150,000

280,000

Annual operating cost, $ per year

92,000

74,000

Salvage value, $

30,000

70,000

Life, years

2

4

Reference no: EM13881999

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