Engineering Economy

Green Content

• CHAPTER 1
  • Introduction to Engineering Economy
  • 1.1 Introduction
  • 1.2 The Principles of Engineering Economy
  • 1.3 Engineering Economy and the Design Process
  • 1.4 Using Spreadsheets in Engineering Economic Analysis
  • 1.5 Try Your Skills
  • 1.6 Summary
• CHAPTER 2
  • Cost Concepts and Design Economics
  • 2.1 Cost Terminology
  • 2.2 The General Economic Environment
  • 2.3 Cost-Driven Design Optimization
  • 2.4 Present Economy Studies
  • 2.5 Case Study–The Economics of Daytime Running Lights
  • 2.6 In Class Exercise
  • 2.7 Try Your Skills
  • 2.8 Summary
  • Appendix 2-A Accounting Fundamentals
• CHAPTER 3
  • Cost-Estimation Techniques
  • 3.1 Introduction
  • 3.2 An Integrated Approach
  • 3.3 Selected Estimating Techniques (Models)
  • 3.4 Parametric Cost Estimating
  • 3.5 Case Study–Demanufacturing of Computers
  • 3.6 Electronic Spreadsheet Modeling: Learning Curve
  • 3.7 In-Class Exercise
  • 3.8 Try Your Skills
  • 3.9 Summary
• CHAPTER 4
  • The Time Value of Money
  • 4.1 Introduction
  • 4.2 Simple Interest
  • 4.3 Compound Interest
  • 4.4 The Concept of Equivalence
  • 4.5 Notation and Cash-Flow Diagrams and Tables
  • 4.6 Relating Present and Future Equivalent Values
  • 4.7 Relating a Uniform Series (Annuity) to Its Present and Future Equivalent
  • 4.8 Summary of Interest Formulas and Relationships for Discrete Compounding
  • 4.9 Deferred Annuities (Uniform Series)
  • 4.10 Equivalence Calculations Involving Multiple Interest Formulas
  • 4.11 Uniform (Arithmetic) Gradient of Cash Flows
  • 4.12 Geometric Sequences of Cash Flows
  • 4.13 Interest Rates that Vary with Time
  • 4.14 Nominal and Effective Interest Rates
  • 4.15 Compounding More Often than Once per Year
  • 4.16 Interest Formulas for Continuous Compounding and Discrete Cash Flows
  • 4.17 Case Study–Understanding Economic “Equivalence”
  • 4.18 In-Class Exercise
  • 4.19 Try Your Skills
  • 4.20 Summary
• CHAPTER 5
  • Evaluating a Single Project
  • 5.1 Introduction
  • 5.2 Determining the Minimum Attractive Rate of Return (MARR)
  • 5.3 The Present Worth Method
  • 5.4 The Future Worth Method
  • 5.5 The Annual Worth Method
  • 5.6 The Internal Rate of Return Method
  • 5.7 The External Rate of Return Method
  • 5.8 The Payback (Payout) Period Method
  • 5.9 Case Study–A Proposed Capital Investment to Improve Process Yield
  • 5.10 Electronic Spreadsheet Modeling: Payback Period Method
  • 5.11 In-Class Exercise
  • 5.12 Try Your Skills
  • 5.13 Summary
  • Appendix 5-A The Multiple Rate of Return Problem with the IRR Method
• CHAPTER 6
  • Comparison and Selection among Alternatives
  • 6.1 Introduction
  • 6.2 Basic Concepts for Comparing Alternatives
  • 6.3 The Study (Analysis) Period
  • 6.4 Useful Lives Are Equal to the Study Period
  • 6.5 Useful Lives Are Unequal among the Alternatives
  • 6.6 Personal Finances
  • 6.7 Case Study–Ned and Larry’s Ice Cream Company
  • 6.8 Postevaluation of Results
  • 6.9 Project Postevaluation Spreadsheet Approach
  • 6.10 In-Class Exercise
  • 6.11 Try Your Skills
  • 6.12 Summary
• CHAPTER 7
  • Depreciation and Income Taxes
  • 7.1 Introduction
  • 7.2 Depreciation Concepts and Terminology
  • 7.3 The Classical (Historical) Depreciation Methods
  • 7.4 The Modified Accelerated Cost Recovery System
  • 7.5 A Comprehensive Depreciation Example
  • 7.6 Introduction to Income Taxes
  • 7.7 The Effective Corporate Income Tax Rate
  • 7.8 Gain (Loss) on the Disposal of an Asset
  • 7.9 General Procedure for Making After-Tax Economic Analyses
  • 7.10 Illustration of Computations of ATCFs
  • 7.11 Economic Value Added
  • 7.12 In-Class Exercise
  • 7.13 Try Your Skills
  • 7.14 Summary
• CHAPTER 8
  • Price Changes and Exchange Rates
  • 8.1 Introduction
  • 8.2 Terminology and Basic Concepts
  • 8.3 Fixed and Responsive Annuities
  • 8.4 Differential Price Changes
  • 8.5 Spreadsheet Application
  • 8.6 Foreign Exchange Rates and Purchasing Power Concepts
  • 8.7 Case Study–Selecting Electric Motors to Power an Assembly Line
  • 8.8 In-Class Exercise
  • 8.9 Try Your Skills
  • 8.10 Summary 394of Single Cash Flows
• CHAPTER 9
  • Replacement Analysis
  • 9.1 Introduction
  • 9.2 Reasons for Replacement Analysis
  • 9.3 Factors that Must Be Considered in Replacement Studies
  • 9.4 Typical Replacement Problems
  • 9.5 Determining the Economic Life of a New Asset (Challenger)
  • 9.6 Determining the Economic Life of a Defender
  • 9.7 Comparisons in Which the Defender’s Useful Life Differs from that of the Challenger
  • 9.8 Retirement without Replacement (Abandonment)
  • 9.9 After-Tax Replacement Studies
  • 9.10 Case Study–Replacement of a Hospital’s Emergency Electrical Supply System
  • 9.11 Try Your Skills
  • 9.12 Summary
• CHAPTER 10
  • Evaluating Projects with the Benefit−Cost Ratio Method
  • 10.1 Introduction
  • 10.2 Perspective and Terminology for Analyzing Public Projects
  • 10.3 Self-Liquidating Projects
  • 10.4 Multiple-Purpose Projects
  • 10.5 Difficulties in Evaluating Public-Sector Projects
  • 10.6 What Interest Rate Should Be Used for Public Projects?
  • 10.7 The Benefit−Cost Ratio Method
  • 10.8 Evaluating Independent Projects by B−C Ratios
  • 10.9 Comparison of Mutually Exclusive Projects by B−C Ratios
  • 10.10 Case Study–Improving a Railroad Crossing
  • 10.11 Try Your Skills
  • 10.12 Summary
• CHAPTER 11
  • Breakeven and Sensitivity Analysis
  • 11.1 Introduction
  • 11.2 Breakeven Analysis
  • 11.3 Sensitivity Analysis
  • 11.4 Multiple Factor Sensitivity Analysis
  • 11.5 Try Your Skills
  • 11.6 Summary
• CHAPTER 12
  • Probabilistic Risk Analysis
  • 12.1 Introduction
  • 12.2 Sources of Uncertainty
  • 12.3 The Distribution of Random Variables
  • 12.4 Evaluation of Projects with Discrete Random Variables
  • 12.5 Evaluation of Projects with Continuous Random Variables
  • 12.6 Evaluation of Risk and Uncertainty by Monte Carlo Simulation
  • 12.7 Performing Monte Carlo Simulation with a Computer
  • 12.8 Decision Trees
  • 12.9 Real Options Analysis
  • 12.10 Summary
• CHAPTER 13
  • The Capital Budgeting Process
  • 13.1 Introduction
  • 13.2 Debt Capital
  • 13.3 Equity Capital
  • 13.4 The Weighted Average Cost of Capital (WACC)
  • 13.5 Project Selection
  • 13.6 Postmortem Review
  • 13.7 Budgeting of Capital Investments and Management Perspective
  • 13.8 Leasing Decisions
  • 13.9 Capital Allocation
  • 13.10 Summary
• CHAPTER 14
  • Decision Making Considering Multiattributes
  • 14.1 Introduction
  • 14.2 Examples of Multiattribute Decisions
  • 14.3 Choice of Attributes
  • 14.4 Selection of a Measurement Scale
  • 14.5 Dimensionality of the Problem
  • 14.6 Noncompensatory Models
  • 14.7 Compensatory Models
  • 14.8 Summary

APPENDICES

• A. Using Excel to Solve Engineering Economy Problems
• B. Abbreviations and Notation
• C. Interest and Annuity Tables for Discrete Compounding
• D. Interest and Annuity Tables for Continuous Compounding
• E. Standard Normal Distribution
• F. Selected References
• G. Solutions to Try Your Skills
• H. Answers to Selected Problems