Engg 100: Engineering Economics Final Project Due: December 11th, 2017 One of the class requirements is to use your engineering economy knowledge in a real-life project. Your analysis should answer two questions, should I rent or buy a house/apartment? And after how long would it make financial sense to buy a house/apartment? For this semester’s venture consider a house/apartment in Hempstead (or a near area) for your assumptions. You must consider the cost and benefits directly associated with both options. Consider that you have a monthly budget of $3,000 for housing expenses so adjust your house/apartment selection to this budget, and also consider that you have about $80,000 in savings that could be used for a downpayment. Your housing needs are 2-3 bedrooms. Please remember that this is an engineering economics project so do not spend too much time selecting the “best” house, use your selection so you can derive financial information. Also, do consider a house in good condition that will not require significant initial investment. This project is not about flipping houses. Buying or renting a house should include heating and cooling costs, and even some regular maintenance issues such as utility costs (electricity, water, gas, cable). Regular maintenance should also include seasonal maintenance such as snow removal or lawn mowing. Furthermore, you should include specific costs per each option. For instance, when buying a house, you must consider a regular amount for cyclical expenses such as taxes, and repairssuch as a new coat of paint every number of years, and pest services. On the other hand, some of these costs might be included in the rent of the house. The following guidelines should be considered in the development of your project, 1. Select two house/apartments for rent/buying in the area. You can select your options from https://www.zillow.com/ consider a similar house for both options, for example, the number of bedrooms, square footage and the location of the houses should be in similar. 2. Identify and estimate all relevant costs for each option. Also, estimate select a 30-year loan for buying the house, look for different options so you can select an appropriate interest rate. Likewise, consider the financial gain from the salvage value of the price of the house after the 30 years. 3. Perform your analysis. Generate your cash flow and perform all the required calculations to answer the fundamental questions. You are required to submit a written report in word and an excel file with your calculations (use excel for your calculations). Your written report should include: 1. Introduction. Describe the selected problem. 2. Analysis. Provide the data you used in solving the problem, including a description of the different engineering economic tools and concepts employed. 3. Results, provide a description of your calculations and results, including tables and charts. 4. Discussion, a discussion should include what your finding is and why you support your findings. 5. Conclusion, draw conclusions from your project and the knowledge acquired in this course. 6. References include your sources. Published information, websites, etc. Grading The project will be graded based on the data and information provided, and the creativity of the analysis techniques utilized; I will give particular attention to the complexity and the accuracy of the information, and the project report format and detail. This project is worth 20% of your final course grade. You can work individually or in teams of two.
your projectmustinclude a comparison chart between your options as the one described in example 9-11. Also, consider using interest rates to calculate increments in the rent price and the value of the house.