| Question |
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 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 value on the plot. (c) Use the plot of PW versus ∆i values to select the better alternative with = 20% per year. Is the answer the same as in part(a)? |
