Engineering Economy

<h3>1. Introduction to Engineering Economy</h3> <ul> <li>1.1 Introduction</li> <li>1.2 The Principles of Engineering Economy</li> <li>1.3 Engineering Economy and the Design Process</li> <li>1.4 Using Spreadsheets in Engineering Economy</li> <li>1.5 Try Your Skills</li> <li>1.6 Summary</li> </ul> <h3>2. Cost Concepts and Design Economics</h3> <ul> <li>2.1 Cost Terminology</li> <li>2.2 The General Economic Environment</li> <li>2.3 Cost-Driven Design Optimization</li> <li>2.4 Present Economy Studies</li> <li>2.5 Case Study: The Economics of Daytime Running Lights</li> <li>2.6 Value Engineering</li> <li>2.7 In-Class Exercise</li> <li>2.8 Try Your Skills</li> <li>2.9 Summary</li> </ul> <h3>3. Cost-Estimation Techniques</h3> <ul> <li>3.1 Introduction</li> <li>3.2 An Integrated Approach</li> <li>3.3 Selected Estimating Techniques (Models)</li> <li>3.4 Parametric Cost Estimating</li> <li>3.5 Case Study: Electric Vehicle Battery Recovery</li> <li>3.6 Electronic Spreadsheet Modeling: Learning Curve</li> <li>3.7 In-Class Exercise</li> <li>3.8 Try Your Skills</li> <li>3.9 Summary</li> </ul> <h3>4. The Time Value of Money</h3> <ul> <li>4.1 Introduction</li> <li>4.2 Simple Interest</li> <li>4.3 Compound Interest</li> <li>4.4 The Concept of Equivalence</li> <li>4.5 Notation and Cash-Flow Diagrams and Tables</li> <li>4.6 Relating Present and Future Equivalent Values of Single Cash Flows</li> <li>4.7 Relating a Uniform Series (Annuity) to Its Present and Future Equivalent Values</li> <li>4.8 Summary of Interest Formulas and Relationships for Discrete Compounding</li> <li>4.9 Deferred Annuities (Uniform Series)</li> <li>4.10 Equivalence Calculations Involving Multiple Interest Formulas</li> <li>4.11 Uniform (Arithmetic) Gradient of Cash Flows</li> <li>4.12 Geometric Sequences of Cash Flows</li> <li>4.13 Interest Rates that Vary with Time</li> <li>4.14 Nominal and Effective Interest Rates</li> <li>4.15 Compounding More Often than Once per Year</li> <li>4.16 Interest Formulas for Continuous Compounding and Discrete Cash Flows</li> <li>4.17 Case Study: Understanding Economic Equivalence</li> <li>4.18 In-Class Exercise</li> <li>4.19 Try Your Skills</li> <li>4.20 Summary</li> </ul> <h3>5. Evaluating a Single Project</h3> <ul> <li>5.1 Introduction</li> <li>5.2 Determining the Minimum Attractive Rate of Return (MARR)</li> <li>5.3 The Present Worth Method</li> <li>5.4 The Future Worth Method</li> <li>5.5 The Annual Worth Method</li> <li>5.6 The Internal Rate of Return Method</li> <li>5.7 The External Rate of Return Method</li> <li>5.8 The Payback (Payout) Period Method</li> <li>5.9 Case Study: Data Center Establishment Project</li> <li>5.10 Electronic Spreadsheet Modeling: Payback Period Method</li> <li>5.11 In-Class Exercise</li> <li>5.12 Try Your Skills</li> <li>5.13 Summary</li> <li>Appendix 5-A The Multiple Rate of Return Problem with the IRR Method</li> </ul> <h3>6. Comparison and Selection among Alternatives</h3> <ul> <li>6.1 Introduction</li> <li>6.2 Basic Concepts for Comparing Alternatives</li> <li>6.3 The Study (Analysis) Period</li> <li>6.4 Useful Lives Are Equal to the Study Period</li> <li>6.5 Useful Lives Are Unequal among the Alternatives</li> <li>6.6 Personal Finances</li> <li>6.7 Case Study: Ned and Larry’s Ice Cream Company</li> <li>6.8 Postevaluation of Results</li> <li>6.9 Project Postevaluation Spreadsheet Approach</li> <li>6.10 In-Class Exercise</li> <li>6.11 Try Your Skills</li> <li>6.12 Summary</li> </ul> <h3>7. Depreciation and Income Taxes</h3> <ul> <li>7.1 Introduction</li> <li>7.2 Depreciation Concepts and Terminology</li> <li>7.3 The Classical (Historical) Depreciation Methods</li> <li>7.4 The Modified Accelerated Cost Recovery System</li> <li>7.5 A Comprehensive Depreciation Example</li> <li>7.6 Introduction to Income Taxes</li> <li>7.7 The Effective Corporate Income Tax Rate</li> <li>7.8 Gain (Loss) on the Disposal of an Asset</li> <li>7.9 General Procedure for Making After-Tax Economic Analyses</li> <li>7.10 Illustration of Computations of ATCFs</li> <li>7.11 Economic Value Added</li> <li>7.12 In-Class Exercise</li> <li>7.13 Try Your Skills</li> <li>7.14 Summary</li> </ul> <h3>8. Price Changes and Exchange Rates</h3> <ul> <li>8.1 Introduction</li> <li>8.2 Terminology and Basic Concepts</li> <li>8.3 Fixed and Responsive Annuities</li> <li>8.4 Differential Price Changes</li> <li>8.5 Spreadsheet Application</li> <li>8.6 Global Exchange Rates and Purchasing Power Concepts</li> <li>8.7 Case Study: Selecting Electric Motors to Power an Assembly Line</li> <li>8.8 In-Class Exercise</li> <li>8.9 Try Your Skills</li> <li>8.10 Summary</li> </ul> <h3>9. Replacement Analysis</h3> <ul> <li>9.1 Introduction</li> <li>9.2 Reasons for Replacement Analysis</li> <li>9.3 Factors that Must Be Considered in Replacement Studies</li> <li>9.4 Typical Replacement Problems</li> <li>9.5 Determining the Economic Life of a New Asset (Challenger)</li> <li>9.6 Determining the Economic Life of a Defender</li> <li>9.7 Comparisons in Which the Defender’s Useful Life Differs from that of the Challenger</li> <li>9.8 Retirement without Replacement (Abandonment)</li> <li>9.9 After-Tax Replacement Studies</li> <li>9.10 Case Study: Replacement of a Hospital’s Emergency Electrical Supply System</li> <li>9.11 In-Class Exercise</li> <li>9.12 Try Your Skills</li> <li>9.13 Summary</li> </ul> <h3>10. Evaluating Projects with the Benefit−Cost Ratio Method</h3> <ul> <li>10.1 Introduction</li> <li>10.2 Perspective and Terminology for Analyzing Public Projects</li> <li>10.3 Self-Liquidating Projects</li> <li>10.4 Multiple-Purpose Projects</li> <li>10.5 Difficulties in Evaluating Public-Sector Projects</li> <li>10.6 What Interest Rate Should Be Used for Public Projects?</li> <li>10.7 The Benefit−Cost Ratio Method</li> <li>10.8 Evaluating Independent Projects by B−C Ratios</li> <li>10.9 Comparison of Mutually Exclusive Projects by B−C Ratios</li> <li>10.10 Case Study: Rural Broadband Internet Expansion</li> <li>10.11 Try Your Skills</li> <li>10.12 Summary</li> </ul> <h3>11. Breakeven and Sensitivity Analysis</h3> <ul> <li>11.1 Introduction</li> <li>11.2 Breakeven Analysis</li> <li>11.3 Sensitivity Analysis</li> <li>11.4 Multiple Factor Sensitivity Analysis</li> <li>11.5 CASE STUDY: If You Build It, They Will Come</li> <li>11.6 Try Your Skills</li> <li>11.7 Summary</li> </ul> <h3>12. Probabilistic Risk Analysis</h3> <ul> <li>12.1 Introduction</li> <li>12.2 Sources of Uncertainty</li> <li>12.3 The Distribution of Random Variables</li> <li>12.4 Evaluation of Projects with Discrete Random Variables</li> <li>12.5 Evaluation of Projects with Continuous Random Variables</li> <li>12.6 Evaluation of Risk and Uncertainty by Monte Carlo Simulation</li> <li>12.7 Performing Monte Carlo Simulation with a Computer</li> <li>12.8 Decision Trees</li> <li>12.9 Real Options Analysis</li> <li>12.10 CASE STUDY: Retirement Balance</li> <li>12.11 Summary</li> </ul> <h3>13. The Capital Budgeting Process</h3> <ul> <li>13.1 Introduction</li> <li>13.2 Debt Capital</li> <li>13.3 Equity Capital</li> <li>13.4 The Weighted Average Cost of Capital (WACC)</li> <li>13.5 Project Selection</li> <li>13.6 Postmortem Review</li> <li>13.7 Budgeting of Capital Investments and Management Perspective</li> <li>13.8 Leasing Decisions</li> <li>13.9 Capital Allocation</li> <li>13.10 Summary</li> </ul> <h3>14. Decision Making Considering Multiattributes</h3> <ul> <li>14.1 Introduction</li> <li>14.2 Examples of Multiattribute Decisions</li> <li>14.3 Choice of Attributes</li> <li>14.4 Selection of a Measurement Scale</li> <li>14.5 Dimensionality of the Problem</li> <li>14.6 Noncompensatory Models</li> <li>14.7 Compensatory Models</li> <li>14.8 Summary</li> </ul> <h3>Appendices</h3> <ul> <li>A. Accounting Fundamentals</li> <li>B. Abbreviations and Notation</li> <li>C. Interest and Annuity Tables for Discrete Compounding</li> <li>D. Interest and Annuity Tables for Continuous Compounding</li> <li>E. Standard Normal Distribution</li> <li>F. Selected References</li> <li>G. Solutions to Try Your Skills</li> <li>H. Answers to Selected Problems</li> </ul> <h4 class="&quot;h5”">Index</h4>