Reflection and Discussion Post
• Chapter 3. Engineering Economic Analysis
• Chapter 4. Life-Cycle Costing
Reflect on the assigned readings for the week. Respond to the following prompts: "What do I feel are the most important aspects of my learning in the chapters this week?" and "What about this learning was really worthy of my time and understanding?" Then explain how important it is in society or business.
Also, provide a graduate-level response to each of the following questions:
• American businesses have often been criticized for short-term thinking that places too much emphasis on payback period and ROR. When Honda started making cars in the early 1970s, for example, the chief executive officer stated that the firm would be "willing to accept an ROR no greater than 2% or 3% for as long as it took to be recognized as the best car maker in the world." In light of the success of many Japanese firms, is the criticism of American business justified?
• Most countries have a progressive income tax system whereby each dollar earned in incrementally higher tax brackets is taxed at an increasingly higher rate. Do you think that a flat tax system would be more fair? How about a proportional tax system? Explain your answer.
• Discuss the effect of taxes on the life-cycle costing (LCC) of passenger cars. Compare domestic and imported cars.
Homework
Activity I: A young engineer decides to save $240 per year toward retirement in 40 years.
• If he invests this sum at the end of every year at 9%, then how much will be accumulated by retirement time?
• If by astute investing the interest rate could be raised to 12%, then what sum could be saved?
• If he deposits one fourth of this annual amount each quarter ($60 per quarter) in an interest bearing account earning a nominal annual interest rate of 12%, compounded quarterly, how much could be saved by retirement time?
• In part (c), then what annual effective interest rate is being earned?
Activity II: Maurice Micklewhite has decided to replant his garden. Show him what the cost is of making an erroneous decision at various stages of the project, starting with conceptual design and ending with the ongoing maintenance of the garden.
Format your homework according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the homework, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.