Continue to discuss further using topic from my W4 posting here I want to talk about using ERR for evaluating this project. The tools as discussed in in Engineering Economy Engineering Book, chapter 5, page 178-211. This is introducing external reinvestment rate (ɛ) per period. Just like IRR, ERR is used to evaluate the economic justification of project. But this time ERR that taken into account the interest rate external at which cash flow generated over the lifecycle of project. This method is also useful for solving similar problems as stated in in problem 5-46 at this book. But, instead of using MARR = 12%, in this posting I am using ɛ = MARR 20% because as I am using real life example as described in my blog posting W4 previously.
Filed under Asyhad, Week 05
1. Problem Definition
At this fifth blog, I will do a qualitative type of the selection decision method. I am planning to buy a motorcycle for short distance transportation. As we know, many brands and variants of motorcycles in the market with competitive quality and price. Therefore, the selection is more based on a subjective feeling or desire rather than the data in the form of numbers.
Filed under Hari W, Week 05
- Problem Definition
Honestly, I had inspired by “container hotel” article as written in Star Newspaper in Malaysia and visited by myself to see it by eyes. The owner said that there are three reason built this hotel in Kuala Lumpur:
- Land price is very expensive in Malaysia.
- There are many scrap containers available in Malaysian Ports [environmental reason].
- They claim that their rented price is only 30% for family package compare to “common hotel”.
With the same spirit and compare it with Bandung as one travel destination, probably this could be good option for business, but I have to perform an exercise a little bit for this assumption. So if Air Asia claim themselves as “Low Cost Carrier Transport/LCCT” then I will claim myself as “Low Cost Hotel Accommodation/LCHA”.
Filed under Arif P, Week 05