Engineering Economy.

Cover -- Contents -- Preface -- Acknowledgments -- Part I: Fundamentals of Engineering Economy -- 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 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 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 Cost Estimation in the Design Process -- 3.6 Case Study-Demanufacturing of Computers -- 3.7 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 of Single Cash Flows -- 4.7 Relating a Uniform Series (Annuity) to Its Present and Future Equivalent Values -- 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 Summary -- Part II: Engineering Economy in Action.

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 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 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 (Marginal) 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 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 Spreadsheet Application -- 8.5 Foreign Exchange Rates and Purchasing Power Concepts -- 8.6 Case Study-Selecting Electric Motors to Power an Assembly Line -- 8.7 Summary -- 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 Summary -- Part III: Additional Topics in Engineering Economy -- 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 Criticisms and Shortcomings of the Benefit-Cost Ratio Method -- 10.11 Case Study-Improving a Railroad Crossing -- 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 Case Study-Analysis of a Business Venture -- 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 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 Case Study-The Oils Well That Ends Well Company -- 12.11 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 Case Study-Financing an Automobile -- 13.11 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 -- Part IV: 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: Answers to Selected Problems -- Index -- A -- B -- C -- D -- E -- F -- G -- H -- I -- J -- L -- M -- N -- O -- P -- R -- S -- T -- U -- V -- W.

Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2018. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.