Fundamentals of Engineering Economics

Cover
Title Page
Copyright Page
Acknowledgments
Contents
Preface
PART 1 UNDERSTANDING MONEY AND ITS MANAGEMENT
Chapter 1 Engineering Economic Decisions
1.1 The Rational Decision-Making Process
1.2 The Engineer’s Role in Business
1.3 Types of Strategic Engineering Economic Decisions
1.4 Fundamental Principles in Engineering Economics
Summary
Self-Test Questions
Problems
Chapter 2 Time Value of Money
2.1 Interest: The Cost of Money
2.2 Economic Equivalence
2.3 Interest Formulas for Single Cash Flows
2.4 Uneven-Payment Series
2.5 Equal-Payment Series
2.6 Dealing with Gradient Series
2.7 More on Equivalence Calculations
Summary
Self-Test Questions
Problems
Chapter 3 Understanding Money Management
3.1 Market Interest Rates
3.2 Calculating Effective Interest Rates Based on Payment Periods
3.3 Equivalence Calculations with Effective Interest Rates
3.4 Debt Management
Summary
Self-Test Questions
Problems
Chapter 4 Equivalence Calculations under Inflation
4.1 Measure of Inflation
4.2 Actual versus Constant Dollars
4.3 Equivalence Calculations under Inflation
Summary
Self-Test Questions
Problems
PART 2 EVALUATING BUSINESS AND ENGINEERING ASSETS
Chapter 5 Present-Worth Analysis
5.1 Loan versus Project Cash Flows
5.2 Initial Project Screening Methods
5.3 Present-Worth Analysis
5.4 Methods to Compare Mutually Exclusive Alternatives
Summary
Self-Test Questions
Problems
Chapter 6 Annual-Equivalence Analysis
6.1 Annual-Equivalent Worth Criterion
6.2 Applying Annual-Worth Analysis
6.3 Comparing Mutually Exclusive Projects
Summary
Self-Test Questions
Problems
Chapter 7 Rate-of-Return Analysis
7.1 Rate of Return
7.2 Methods for Finding Rate of Return
7.3 Internal-Rate-of-Return Criterion
7.4 Incremental Analysis for Comparing Mutually Exclusive Alternatives
Summary
Self-Test Questions
Problems
Chapter 7A: Resolution of Multiple Rates of Return
7A-1 Net-Investment Test
7A-2 The Need for an External Interest Rate
7A-3 Calculation of Return on Invested Capital for Mixed Investments
Chapter 8 Benefit–Cost Analysis
8.1 Evaluation of Public Projects
8.2 Benefit–Cost Analysis
8.3 Profitability Index
8.4 Highway Benefit–Cost Analysis
Summary
Self-Test Questions
Problems
PART 3 DEVELOPMENT OF PROJECT CASH FLOWS
Chapter 9 Accounting for Depreciation and Income Taxes
9.1 Accounting Depreciation
9.2 Book Depreciation Methods
9.3 Tax Depreciation Methods
9.4 Corporate Taxes
Summary
Self-Test Questions
Problems
Chapter 10 Project Cash-Flow Analysis
10.1 Understanding Project Cost Elements
10.2 Why Do We Need to Use Cash Flows in Economic Analysis?
10.3 Income-Tax Rate to Be Used in Project Evaluation
10.4 Incremental Cash Flows from Undertaking a Project
10.5 Developing Project Cash Flow Statements
10.6 Effects of Inflation on Project Cash Flows
Summary
Self-Test Questions
Problems
Chapter 11 Handling Project Uncertainty
11.1 Origins of Project Risk
11.2 Methods of Describing Project Risk
11.3 Probabilistic Cash Flow Analysis
11.4 Considering the Project Risk by Discount Rate
Summary
Self-Test Questions
Problems
PART 4 SPECIAL TOPICS IN ENGINEERING ECONOMICS
Chapter 12 Replacement Decisions
12.1 Replacement-Analysis Fundamentals
12.2 Economic Service Life
12.3 Replacement Analysis When the Required Service Period Is Long
12.4 Replacement Analysis with Tax Considerations
Summary
Self-Test Questions
Problems
Chapter 13 Understanding Financial Statements
13.1 Accounting: The Basis of Decision Making
13.2 Financial Status for Businesses
13.3 Using Ratios to Make Business Decisions
13.4 Principle of Investing in Financial Assets
Summary
Self-Test Questions
Problems
Appendix A: Answers to the Self-Test Questions
Appendix B: Interest Factors for Discrete Compounding
Appendix C: How to Read the Cumulative Standardized Normal Distribution Function
Index
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