Engineering economy

Description

Title Contents LEARNING STAGE 1 THE FUNDAMENTALS Chapter 1 Foundations of Engineering Economy 1.1 Engineering Economics: Description and Role in Decision Making 1.2 Performing an Engineering Economy Study 1.3 Professional Ethics and Economic Decisions 1.4 Interest Rate and Rate of Return 1.5 Terminology and Symbols 1.6 Cash Flows: Estimation and Diagramming 1.7 Economic Equivalence 1.8 Simple and Compound Interest 1.9 Minimum Attractive Rate of Return 1.10 Introduction to Spreadsheet Use Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Renewable Energy Sources for Electricity Generation Case Study—Refrigerator Shells Chapter 2 Factors: How Time and Interest Affect Money PE Progressive Example—The Cement Factory Case 2.1 Single-Amount 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 Factor Values for Untabulated i or n Values 2.5 Arithmetic Gradient Factors (P�G and A�G) 2.6 Geometric Gradient Series Factors 2.7 Determining i or n for Known Cash Flow Values Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Time Marches On; So Does the Interest Rate Chapter 3 Combining Factors and Spreadsheet Functions 3.1 Calculations for Uniform Series That Are Shifted 3.2 Calculations Involving Uniform Series and Randomly Placed Single Amounts 3.3 Calculations for Shifted Gradients Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Preserving Land for Public Use Chapter 4 Nominal and Effective Interest Rates PE Progressive Example—The Credit Card Offer Case 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: Payment Period and Compounding Period 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 � CP 4.8 Effective Interest Rate for Continuous Compounding 4.9 Interest Rates That Vary over Time Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Is Owning a Home a Net Gain or Net Loss over Time? LEARNING STAGE 2 BASIC ANALYSIS TOOLS Chapter 5 Present Worth Analysis PE Progressive Example—Water for Semiconductor Manufacturing Case 5.1 Formulating 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 Analysis Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Comparing Social Security Benefi ts Chapter 6 Annual Worth Analysis 6.1 Advantages and Uses of Annual Worth Analysis 6.2 Calculation of Capital Recovery and AW Values 6.3 Evaluating Alternatives by Annual Worth Analysis 6.4 AW of a Permanent Investment 6.5 Life-Cycle Cost Analysis Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—The Changing Scene of an Annual Worth Analysis Chapter 7 Rate of Return Analysis: One Project 7.1 Interpretation of a Rate of Return Value 7.2 Rate of Return Calculation Using a PW or AW Relation 7.3 Special Considerations When Using the ROR Method 7.4 Multiple Rate of Return Values 7.5 Techniques to Remove Multiple Rates of Return 7.6 Rate of Return of a Bond Investment Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Developing and Selling an Innovative Idea 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 Alternatives 8.7 All-in-One Spreadsheet Analysis (Optional) Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—ROR Analysis with Estimated Lives That Vary Case Study—How a New Engineering Graduate Can Help His Father Chapter 9 Benefi t/Cost Analysis and Public Sector Economics PE Progressive Example—Water Treatment Facility #3 Case 9.1 Public Sector Projects 9.2 Benefi t/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 9.5 Service Sector Projects and Cost-Effectiveness Analysis 9.6 Ethical Considerations in the Public Sector Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Comparing B/C Analysis and CEA of Traffi c Accident Reduction LEARNING STAGE 2 EPILOGUE: SELECTING THE BASIC ANALYSIS TOOL LEARNING STAGE 3 MAKING BETTER DECISIONS Chapter 10 Project Financing and Noneconomic Attributes 10.1 MARR Relative to the Cost of Capital 10.2 Debt-Equity Mix and Weighted Average Cost of Capital 10.3 Determination of the Cost of Debt Capital 10.4 Determination of the Cost of Equity Capital and the MARR 10.5 Effect of Debt-Equity Mix on Investment Risk 10.6 Multiple Attribute Analysis: Identifi cation and Importance of Each Attribute 10.7 Evaluation Measure for Multiple Attributes Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Which Is Better—Debt or Equity Financing? Chapter 11 Replacement and Retention Decisions PE Progressive Example—Keep or Replace the Kiln Case 11.1 Basics of a 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 Specifi ed Study Period 11.6 Replacement Value Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Will the Correct ESL Please Stand? Chapter 12 Independent Projects with 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 12.5 Additional Project Ranking Measures Chapter Summary Problems Additional Problems and FE Exam Review Questions Chapter 13 Breakeven and Payback Analysis 13.1 Breakeven Analysis for a Single Project 13.2 Breakeven Analysis Between Two Alternatives 13.3 Payback Analysis 13.4 More Breakeven and Payback Analysis on Spreadsheets Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Water Treatment Plant Process Costs LEARNING STAGE 4 ROUNDING OUT THE STUDY Chapter 14 Effects of Infl ation 14.1 Understanding the Impact of Infl ation 14.2 Present Worth Calculations Adjusted for Infl ation 14.3 Future Worth Calculations Adjusted for Infl ation 14.4 Capital Recovery Calculations Adjusted for Infl ation Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Infl ation versus Stock and Bond Investments Chapter 15 Cost Estimation and Indirect Cost Allocation 15.1 Understanding How Cost Estimation Is Accomplished 15.2 Unit Method 15.3 Cost Indexes 15.4 Cost-Estimating Relationships: Cost-Capacity Equations 15.5 Cost-Estimating Relationships: Factor Method 15.6 Traditional Indirect Cost Rates and Allocation 15.7 Activity-Based Costing (ABC) for Indirect Costs 15.8 Making Estimates and Maintaining Ethical Practices Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Indirect Cost Analysis of Medical Equipment Manufacturing Costs Case Study—Deceptive Acts Can Get You in Trouble Chapter 16 Depreciation Methods 16.1 Depreciation Terminology 16.2 Straight Line (SL) Depreciation 16.3 Declining Balance (DB) and Double Declining Balance (DDB) Depreciation 16.4 Modifi ed Accelerated Cost Recovery System (MACRS) 16.5 Determining the MACRS Recovery Period 16.6 Depletion Methods Chapter Summary Appendix 16A.1 Sum-of-Years-Digits (SYD) and Unit-of-Production (UOP) Depreciation 16A.2 Switching between Depreciation Methods 16A.3 Determination of MACRS Rates Problems Additional Problems and FE Exam Review Questions Appendix Problems Chapter 17 After-Tax Economic Analysis 17.1 Income Tax Terminology and Basic Relations 17.2 Calculation of Cash Flow after Taxes 17.3 Effect on Taxes of Different Depreciation Methods and Recovery Periods 17.4 Depreciation Recapture and Capital Gains (Losses) 17.5 After-Tax Evaluation 17.6 After-Tax Replacement Study 17.7 After-Tax Value-Added Analysis 17.8 After-Tax Analysis for International Projects 17.9 Value-Added Tax Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—After-Tax Analysis for Business Expansion Chapter 18 Sensitivity Analysis and Staged Decisions 18.1 Determining Sensitivity to Parameter Variation 18.2 Sensitivity Analysis Using Three Estimates 18.3 Estimate Variability and the Expected Value 18.4 Expected Value Computations for Alternatives 18.5 Staged Evaluation of Alternatives Using a Decision Tree 18.6 Real Options in Engineering Economics Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Sensitivity to the Economic Environment Case Study—Sensitivity Analysis of Public Sector Projects—Water Supply Plans Chapter 19 More on Variation and Decision Making under Risk 19.1 Interpretation of Certainty, Risk, and Uncertainty 19.2 Elements Important to Decision Making under Risk 19.3 Random Samples 19.4 Expected Value and Standard Deviation 19.5 Monte Carlo Sampling and Simulation Analysis Chapter Summary Problems Additional Problems and FE Exam Review Questions Case Study—Using Simulation and Three-Estimate Sensitivity Analysis Appendix A Using Spreadsheets and Microsoft Excel© A.1 Introduction to Using Excel A.2 Organization (Layout) of the Spreadsheet A.3 Excel Functions Important to Engineering Economy A.4 Goal Seek—A Tool for Breakeven and Sensitivity Analysis A.5 Solver—An Optimizing Tool for Capital Budgeting, Breakeven, and Sensitivity Analysis A.6 Error Messages Appendix B Basics of Accounting Reports and Business Ratios B.1 The Balance Sheet B.2 Income Statement and Cost of Goods Sold Statement B.3 Business Ratios Appendix C Code of Ethics for Engineers Appendix D Alternate Methods for Equivalence Calculations D.1 Using Programmable Calculators D.2 Using the Summation of a Geometric Series Appendix E Glossary of Concepts and Terms E.1 Important Concepts and Guidelines E.2 Symbols and Terms Reference Materials Factor Tables Photo Credits Index