Four hundred pounds of copper are used in a typical 2,200-square-foot newly constructed house....

Question

Four hundred pounds of copper are used in a typical 2,200-square-foot newly constructed house. Today’s copper price is $3.75 per pound.

a. If copper prices are expected to increase 8.5% per year (on average), what is the cost of copper going to be in a new 2,400-square-foot house built 10 years from now? Use a cost-capacity factor of 1.0.

b. To minimize building costs, do you think that another less-expensive material (e.g., aluminum) will be substituted for copper in the electrical wiring in new homes?

David · Accepted Answer

a)​ ​To​ ​determine​ ​the​ ​cost​ ​of​ ​copper​ ​is​ ​going​ ​to​ ​be​ ​in​ ​a​ ​new​ ​2,400​ ​square​ ​foot​ ​house​ ​built​ ​10 
years,​ ​we​ ​proceed​ ​as​ ​follows: 
The​ ​cost​ ​of​ ​copper​ ​in​ ​2,400​ ​square​ ​foot​ ​house​ ​now​ ​will​ ​be​ ​given​ ​below​ ​as: 
Since​ ​2,200​ ​square​ ​foot​ ​house​ ​consists​ ​400lb​ ​of​ ​copper​ ​which​ ​cost​ ​$3.75​ ​per​ ​pound; 
​ ​​ ​  
The​ ​cost​ ​of​ ​copper​ ​$1,636.

Four hundred pounds of copper are used in a typical 2,200-square-foot newly constructed house. Today’s copper price is $3.75 per pound. a. If copper prices are expected to increase 8.5% per year (on...

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