Ramirez Industries is considering two types of materials for roofing its warehouses. EPDM is an elastomeric polymer synthesized from ethylene, propylene and a small amount of diene monomer, compounded with carbon black, processing oils and various cross-linking and stabilizing agents. The 75-mil thickness will cost $4.10 per square foot and will last for 25 years. A thin sheet aluminum roof will cost $6.44 per square foot, out it will last for 50 years. Using an interest rate of 10% per year and a present worth comparison, determine whether the company should install the polymer or the aluminum roof.

Ramirez Industries is considering two types of materials for roofing its warehouses. EPDM is an elastomeric polymer synthesized from ethylene, propylene and a small amount of diene monomer, compounded with carbon black, processing oils and various cross-linking and stabilizing agents. The 75-mil thickness will cost $4.10 per square foot and will last for 25 years. A thin sheet aluminum roof will cost $6.44 per square foot, out it will last for 50 years. Using an interest rate of 10% per year and a present worth comparison, determine whether the company should install the polymer or the aluminum roof.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Ramirez Industries is considering two types of materials for roofing its warehouses. EPDM is an elastomeric
polymer synthesized from ethylene, propylene and a small amount of diene monomer, compounded with
carbon black, processing oils and various cross-linking and stabilizing agents. The 75-mil thickness will cost
$4.10 per square foot and will last for 25 years. A thin sheet aluminum roof will cost $6.44 per square foot,
out it will last for 50 years. Using an interest rate of 10% per year and a present worth comparison,
determine whether the company should install the polymer or the aluminum roof.

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