Title:
Engineering economy
Personal Author:
Publication Information:
United State : Higher Education, 2005
ISBN:
9780073203829
Subject Term:
Added Author:
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Library | Item Barcode | Call Number | Material Type | Item Category 1 | Status |
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Summary
Summary
This student-friendly text on the current economic issues particular to engineering covers the topics needed to analyze engineering alternatives. Students use both hand-worked and spreadsheet solutions of examples, problems and case studies. In this edition the options have been increased, with an expanded spreadsheet analysis component, twice the number of case studies, and virtually all new end-of-chapter problems. The chapters on factor derivation and usage, cost estimation, replacement studies, and after-tax evaluation have been heavily revised. New material is included on public sector projects and cost estimation. A reordering of chapters puts the fundamental topics up front in the text. Many chapters include a special set of problems that prepare the students for the Fundamentals of Engineering (FE) exam. This college-level text provides students and practicing professionals with a solid preparation in the financial understanding of engineering problems and projects, as well as the techniques needed for evaluating and making sound economic decisions. Distinguishing characteristics include learning objectives for each chapter, an easy-to-read writing style, many solved examples, integrated spreadsheets, and case studies throughout the text. Graphical cross-referencing between topics and quick-solve spreadsheet solutions are indicated in the margins throughout the text. While the chapters are progressive, over three-quarters can stand alone, allowing instructors flexibility for meeting course needs. A complete online learning center (OLC) offers supplemental practice problems, spreadsheet exercises, and review questions for the Fundamentals of Engineering (FE) exam.
Table of Contents
| Level 1 This is How It All Starts |
| Chapter 1 Foundations of Engineering Economy |
| 1.1 Why Engineering Economy is Important to Engineers (and other professionals) |
| 1.2 Role of Engineering Economy in Decision Making |
| 1.3 Performing an Engineering Economy Study |
| 1.4 Interest Rate and Rate of Return |
| 1.5 Equivalence |
| 1.6 Simple and Compound Interest |
| 1.7 Terminology and Symbols |
| 1.8 Introduction to Solution by Computer |
| 1.9 Minimum Attractive Rate of Return |
| 1.10 Cash Flows: Their Estimation and Diagramming |
| 1.11 Rule of 72: Estimating Doubling Time and Interest Rate |
| 1.12 Spreadsheet Application - Simple and Compound Interest, and Changing Cash Flow Estimates Additional Examples Problems, FE Review Problems |
| Extended Exercise -Effects of Compound Interest |
| Case Study -Describing Alternatives for Producing Refrigerator Shells |
| Chapter 2 Factors: How Time and Interest Affect Money |
| 2.1 Single-Payment Factors (F/P and P/F) |
| 2.2 Uniform-Series Present-Worth Factor and Capital-Recovery Factor (P/A and A/P) |
| 2.3 Sinking-Fund Factor and Uniform-Series Compound-Amount Factor (A/F and F/A) |
| 2.4 Interpolation in Interest Tables |
| 2.5 Arithmetic Gradient Factors (P/G and A/G) |
| 2.6 Geometric Gradient Series Factors |
| 2.7 Determination of an Unknown Interest Rate |
| 2.8 Determination of Unknown Number of Years |
| 2.9 Spreadsheet Application- Basic Sensitivity Analysis Additional Example Problems, FE Review Problems |
| Case Study -What a Difference the Years and Compound Interest Can Make |
| Chapter 3 Combining Factors |
| 3.1 Calculations for Uniform Series that are Shifted |
| 3.2 Calculations Involving Uniform-Series and Random-Placed Single Amounts |
| 3.3 Calculations for Shifted Gradients |
| 3.4 Shifted Decreasing Arithmetic Gradients |
| 3.5 Spreadsheet Application -Using Different Functions Additional Example Problems, FE Review Problems |
| Extended Exercise -Preserving Land for Public Use |
| Chapter 4 Nominal and Effective Interest Rates |
| 4.1 Nominal and Effective Interest Rate Statements |
| 4.2 Effective Annual Interest Rates |
| 4.3 Effective Interest Rates for Any Time Period |
| 4.4 Equivalence Relations: Comparing Payment Period and Compounding Period Lengths (PP vs. CP) |
| 4.5 Equivalence Relations: Single Amounts with PP > = CP |
| 4.6 Equivalence Relations: Series with PP > = CP |
| 4.7 Equivalence Relations: Single Amounts and Series with PP |
| 4.8 Effective Interest Rate for Continuous Compounding |
| 4.9 Interest Rates that Vary Over Time Problems, FE Review Problems |
| Case Study -Financing a House |
| Level 2 Tools for Evaluating Alternatives |
| Chapter 5 Present Worth Analysis |
| 5.1 Formulating Mutually Exclusive Alternatives |
| 5.2 Present Worth Analysis of Equal-Life Alternatives |
| 5.3 Present Worth Analysis of Different-Life Alternatives |
| 5.4 Future Worth Analysis |
| 5.5 Capitalized Cost Calculation and Analysis |
| 5.6 Payback Period Analysis |
| 5.7 Life-Cycle Cost |
| 5.8 Present Worth of Bonds |
| 5.9 Spreadsheet Applications-PW Analysis and Payback Period Problems, FE Review Problems |
| Extended Exercise -Evaluation of Social Security Retirement Estimates |
| Case Study -Payback Evaluation of Ultralow-Flush Toilet Program |
| Chapter 6 Annual Worth Analysis |
| 6.1 Advantages and Uses of Annual Worth Analysis |
| 6.2 Calculations of Capital Recovery and AW Values |
| 6.3 Evaluating Alternatives by Annual Worth Analysis |
| 6.4 AW of a Permanent Investment Problems, FE Review Problems |
| Case Study -The Changing Scene of an Annual Worth Analysis |
| Chapter 7 Rate of Return Analysis: Single Alternative |
| 7.1 Interpretation of a Rate of Return Value |
| 7.2 Rate of Return Calculation Using a PW or AW Equation |
| 7.3 Cautions When Using the ROR Method |
| 7.4 Multiple Rate of Return Values |
| 7.5 Composite Rate of Return: Removing Multiple i* Values |
| 7.6 Rate of Return of a Bond Investment Problems, FE Review Problems |
| Extended Exercise 1 -The Cost of a Poor Credit Rating |
| Extended Exercise 2 -When Is It Best to Sell a Business? |
| Case Study -Bob Learns About Multiple Rates of Return |
| Chapter 8 Rate of Return Analysis: Multiple Alternatives |
| 8.1 Why Incremental Analysis Is Necessary |
| 8.2 Calculation of Incremental Cash Flows for ROR Analysis |
| 8.3 Interpretation of Rate of Return on the Extra Investment |
| 8.4 Rate of Return Evaluation Using PW: Incremental and Breakeven |
| 8.5 Rate of Return Evaluation Using AW |
| 8.6 Incremental ROR Analysis of Multiple Mutually Exclusive Alternatives |
| 8.7 Spreadsheet Application - PW, AW, and ROR Analysis All in One Problems, FE Review Problems |
| Extended Exercise -Incremental ROR Analysis When Estimated Alternative Lives Are Uncertain |
| Case Study - So Many Options. Can a New Engineering Graduate Help Her Father? |
| Case Study - PW Analysis When Multiple Interest Rates Are Present |
| Chapter 9 Benefit/Cost Analysis and Public Sector Economics |
| 9.1 Public Sector Projects |
| 9.2 Benefit/Cost Analysis of a Single Project |
| 9.3 Alternative Selection Using Incremental B/C Analysis |
| 9.4 Incremental B/C Analysis of Multiple, Mutually Exclusive Alternatives Problems, FE Review Problems |
| Extended Exercise - Costs to Provide Ladder Truck Service for Fire Protection |
| Case Study - Freeway Lighting |
| Chapter 10 Making Choices: the Method, MARR, and Multiple Attributes |
| 10.1 Comparing Mutually Exclusive Alternatives by Different Evaluation Methods |
| 10.2 MARR Relative to the Cost of Capital |
| 10.3 Debt-Equity Mix and Weighted Average Cost of Capital |
| 10.4 Determination of the Cost of Debt Capital |
| 10.5 Determination of the Cost of Equity Capital and the MARR |
| 10.6 Effect of Debt-Equity Mix on Investment Risk |
| 10.7 Multiple Attribute Analysis: Identification and Importance of Each Attribute |
| 10.8 Evaluation Measure for Multiple Attributes Problems |
| Extended Exercise - Emphasizing the Right Things |
| Case Study - Which Way to Go - Debt or Equity Financing? |
| Level 3 Making Decisions on Real-World Projects |
| Chapter 11 Replacement and Retentions Decisions |
| 11.1 Basics of the Replacement Study |
| 11.2 Economic Service Life |
| 11.3 Performing a Replacement Study |
| 11.4 Additional Considerations in a Replacement Study |
| 11.5 Replacement Study Over a Specific Study Period Problems |
| Extended Exercise - Economic Service Life Under Varying Conditions |
| Case Study - Replacement Analysis for Quarry Equipment |
| Chapter 12 Selection from Independent Projects Under Budget Limitation |
| 12.1 An Overview of Capital Rationing Among Projects |
| 12.2 Capital Rationing Using PW Analysis of Equal-Life Projects |
| 12.3 Capital Rationing Using PW Analysis of Unequal-Life Projects |
| 12.4 Capital Budgeting Problem Formulation Using Linear Programming Problems |
| Case Study - Lifelong Engineering Education in a Web Environment |
| Chapter 13 Breakeven Analysis |
| 13.1 Breakeven Analysis for a Single Project |
| 13.2 Breakeven Analysis Between Two Alternatives |
| 13.3 Spreadsheet Application - Using Excel's Solver for Breakeven Analysis Problems |
| Case Study - Water Treatment Process Costs |
| Level 4 Rounding Out the Study |
| Chapter 14 Effects of Inflation |
| 14.1 Understanding the Impact of Inflation |
| 14.2 Present Worth Calculations Adjusted for Inflation |
| 14.3 Future Worth Calculations Adjusted for Inflation |
| 14.4 Capital Recovery Calculations Adjusted for Inflation Problems, FE Review Problems |
