1. Team 8 Being Self-Employed Vs. Being Employed

2. Team Members & Roles Terence Krall: Leader Wellman Yu: Organizer Wellman Yu: Organizer Olaide Olambiwonnu: Summarizer Olaide Olambiwonnu: Summarizer Christopher Narvaez: Techie Christopher Narvaez: Techie

3. Team Members & Roles Terence Krall: Leader Terence Krall: Leader Wellman Yu: Organizer Wellman Yu: Organizer Olaide Olambiwonnu: Summarizer Olaide Olambiwonnu: Summarizer Christopher Narvaez: Techie Christopher Narvaez: Techie

4. Scenarios A 35 year old construction worker with about 10 years of experience has just inherited a $100,000. With this money, he can either start his own construction company or remain employed at his construction job while investing the money at a rate of 6% for 10 years. Which is the better option?

5. Scenario 1 Starts a Construction Company Advantages: No Boss No Boss Schedule Varies Schedule Varies Tax Write-Offs Tax Write-Offs Disadvantages: Income varies No Benefits

6. 10% of the cash flow is saved each year 10% of the cash flow is saved each year MARR: 12% MARR: 12% Time Period: 10 years Time Period: 10 years Future Worth: $359, 956.73 Future Worth: $359, 956.73

7. Scenario 2 Remains Employed Advantages: Steady Income Steady Income Steady Schedule Steady Schedule Benefits Benefits Disadvantages: Boss No tax write-offs

8. MARR: 6% MARR: 6% Time Period: 10 years Time Period: 10 years Future Worth: $335, 783.94 Future Worth: $335, 783.94

9. Scenario 1 results in a greater future worth Scenario 1 results in a greater future worth Therefore, starting his own construction company is the better option. Therefore, starting his own construction company is the better option.

10. Sensitivity Analysis Scenario 1: If MARR is reduced to 10% or 11%, scenario 2 is preferred MARR is reduced to 10% or 11%, scenario 2 is preferred time period is reduced 8 or 9 years, scenario 2 is preferred time period is reduced 8 or 9 years, scenario 2 is preferred

11. Scenario 2: If MARR is increased 8%, scenario 1 is preferred MARR is increased 8%, scenario 1 is preferred time period is increased 12 years, scenario 1 is preferred. time period is increased 12 years, scenario 1 is preferred.

12. Useful Resource http://www.ajdesigner.com/phppresentw orth/present_worth_value_equation_futu re.php http://www.ajdesigner.com/phppresentw orth/present_worth_value_equation_futu re.php This website is useful for all aspects of Engineering Economic Analysis This website is useful for all aspects of Engineering Economic Analysis It can calculate present worth, future worth, interest rates, time period, depreciation etc. It can calculate present worth, future worth, interest rates, time period, depreciation etc. It is also good for solving math, physics, chemistry, engineering, and all science problems. It is also good for solving math, physics, chemistry, engineering, and all science problems.

13. RESOURCES Engineering Economic Analysis- 2 nd Edition by Donald G. Newnan et al. Engineering Economic Analysis- 2 nd Edition by Donald G. Newnan et al. Personal Interview with a self-employed construction worker Personal Interview with a self-employed construction worker