Digital product.
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 Try Your Skills
 1.6 Summary
CHAPTER 2 Cost Concepts and Design Economics

 2.1 Cost Terminology
 2.2 The General Economic Environment
 2.3 CostDriven Design Optimization
 2.4 Present Economy Studies
 2.5 Case Study—The Economics of Daytime Running Lights
 2.6 Try Your Skills
 2.7 Summary
 Appendix 2A: Accounting Fundamentals
CHAPTER 3 CostEstimation Techniques

 3.1 Introduction
 3.2 An Integrated Approach
 3.3 Selected Estimating Techniques (Models)
 3.4 Parametric Cost Estimating
 3.5 Case Study—Demanufacturing of Computers
 3.6 Electronic Spreadsheet Modeling: Learning Curve
 3.7 Try Your Skills
 3.8 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 CashFlow 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 Try Your Skills
 4.19 Summary
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 Electronic Spreadsheet Modeling: Payback Period Method
 5.11 Try Your Skills
 5.12 Summary
 Appendix 5A: 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 Project Postevaluation Spreadsheet Approach
 6.10 Try Your Skills
 6.11 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 AfterTax Economic Analyses
 7.10 Illustration of Computations of ATCFs
 7.11 Economic Value Added
 7.12 Try Your Skills
 7.13 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 Differential Price Changes
 8.5 Spreadsheet Application
 8.6 Foreign Exchange Rates and Purchasing Power Concepts
 8.7 Case Study—Selecting Electric Motors to Power an Assembly Line
 8.8 Try Your Skills
 8.9 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 inWhich the Defender’s Useful Life Differs from that of the Challenger
 9.8 Retirement without Replacement (Abandonment)
 9.9 AfterTax Replacement Studies
 9.10 Case Study—Replacement of a Hospital’s Emergency Electrical Supply System
 9.11 Summary
CHAPTER 10 Evaluating Projects with the Benefit–Cost Ratio Method

 10.1 Introduction
 10.2 Perspective and Terminology for Analyzing Public Projects
 10.3 SelfLiquidating Projects
 10.4 MultiplePurpose Projects
 10.5 Difficulties in Evaluating PublicSector 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 Case Study—Improving a Railroad Crossing
 10.11 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 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 Risk and 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 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 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