5. 6.31 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 Al or Fe nanoparticles 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.

1. Determine which nanoparticle type the company should select using an incremental rate of return analysis.

2. Solve part

(a) using a spreadsheet and, on the same worksheet, plot the PW versus different i values for each alternative. Indicate the breakeven i* value and the MARR value on the plot.
3. Plot PW versus Δi values and use it to select the better alternative with MARR = 20% per year. Is the answer the same as in part (a)?
Table Summary: Table divided into 3 columns summarizes cost estimate for two alternatives of nanoparticles. The first column showing the items and the second and third column showing the headings:
Type Fe and Type Al.
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 Page 189