Fundamentals of Engineering Economic Analysis
2nd Edition
Book
Paperback/Softback
978-1-118-98763-6 (ISBN)
Description
Fundamentals of Engineering Economic Analysis offers a powerful, visually-rich approach to the subject-delivering streamlined yet rigorous coverage of the use of economic analysis techniques in engineering design. This award-winning textbook provides an impressive array of pedagogical tools to maximize student engagement and comprehension, including learning objectives, key term definitions, comprehensive case studies, classroom discussion questions, and challenging practice problems. Clear, topically-organized chapters guide students from fundamental concepts of borrowing, lending, investing, and time value of money, to more complex topics such as capitalized and future worth, external rate of return, deprecation, and after-tax economic analysis.
This fully-updated second edition features substantial new and revised content that has been thoroughly re-designed to support different learning and teaching styles. Numerous real-world vignettes demonstrate how students will use economics as practicing engineers, while plentiful illustrations, such as cash flow diagrams, reinforce student understanding of underlying concepts. Extensive digital resources now provide an immersive interactive learning environment, enabling students to use integrated tools such as Excel. The addition of the WileyPLUS platform provides tutorials, videos, animations, a complete library of Excel video lessons, and much more.
This fully-updated second edition features substantial new and revised content that has been thoroughly re-designed to support different learning and teaching styles. Numerous real-world vignettes demonstrate how students will use economics as practicing engineers, while plentiful illustrations, such as cash flow diagrams, reinforce student understanding of underlying concepts. Extensive digital resources now provide an immersive interactive learning environment, enabling students to use integrated tools such as Excel. The addition of the WileyPLUS platform provides tutorials, videos, animations, a complete library of Excel video lessons, and much more.
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John A. White | Kellie S. Grasman | Kenneth E. Case
Fundamentals of Engineering Economic Analysis
Book
08/2013
Wiley
€149.00
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Content
1 An Overview of Engineering Economic Analysis 1
1.1 Time Value of Money 2
1.2 Engineering Economy Principles 5
1.3 Economic Justification of Capital Investments 8
2 Time Value of Money Calculations 15
2.1 Cash Flow Diagrams 16
2.2 Single Cash Flows 19
2.3 Multiple Cash Flows: Irregular Cash Flows 27
2.4 Multiple Cash Flows: Uniform Series of Cash Flows 31
2.5 Multiple Cash Flows: Gradient Series of Cash Flows 38
2.6 Multiple Cash Flows: Geometric Series of Cash Flows 42
2.7 Compounding Frequency 46
3 Equivalence, Loans, and Bonds 59
3.1 Equivalence 60
3.2 Interest Payments and Principal Payments 65
3.3 Bond Investments 70
3.4 Variable Interest Rates 73
4 Present Worth 76
4.1 Comparing Alternatives 77
4.2 Present Worth Calculations 81
4.3 Benefit-Cost Analysis 87
4.4 Discounted Payback Period 99
4.5 Capitalized Worth 106
5 Annual Worth and Future Worth 113
5.1 Annual Worth 114
5.2 Future Worth 119
6 Rate of Return 128
6.1 Internal Rate of Return Calculations 130
6.2 External Rate of Return Calculations 137
7 Replacement Analysis 144
7.1 Cash Flow and Opportunity Cost
Approaches to Replacement Analysis 145
7.2 Optimum Replacement Interval 150
8 Depreciation 155
8.1 Depreciation in Economic Analysis 156
8.2 Straight-Line and Declining Balance
Depreciation Methods 158
8.3 Modified Accelerated Cost Recovery System (MACRS) 165
8.4 MACRS with Bonus Depreciation 171
9 Income Taxes 175
9.1 Corporate Income-Tax Rates 177
9.2 After-Tax Analysis Using Retained Earnings (No Borrowing) 180
9.3 After-Tax Analysis Using Borrowed Capital 188
9.4 Leasing Versus Purchasing Equipment 194
9.5 After-Tax Analysis with Bonus Depreciation 196
9.6 After-Tax Analysis with a Section 179 Expense Deduction 198
10 Inflation 203
10.1 The Meaning and Measure of Inflation 204
10.2 Before-Tax Analysis 208
10.3 After-Tax Analysis 211
10.4 After-Tax Analysis with Borrowed Capital 213
11 Break-Even, Sensitivity, and Risk Analysis 219
11.1 Break-Even Analysis 221
11.2 Sensitivity Analysis 225
11.3 Risk Analysis 231
12 Capital Budgeting 245
12.1 The Classical Capital Budgeting Problem 246
12.2 Capital Budgeting Problem with Indivisible Investments 249
12.3 Capital Budgeting Problem with Divisible Investments 254
13 Obtaining and Estimating Cash Flows 259
13.1 Cost Terminology 261
13.2 Cost Estimation 280
13.3 General Accounting Principles 285
13.4 Cost Accounting Principles 297
13.5 Economic Value Added 303
Appendix A 310
Appendix B 345
Index 349
1.1 Time Value of Money 2
1.2 Engineering Economy Principles 5
1.3 Economic Justification of Capital Investments 8
2 Time Value of Money Calculations 15
2.1 Cash Flow Diagrams 16
2.2 Single Cash Flows 19
2.3 Multiple Cash Flows: Irregular Cash Flows 27
2.4 Multiple Cash Flows: Uniform Series of Cash Flows 31
2.5 Multiple Cash Flows: Gradient Series of Cash Flows 38
2.6 Multiple Cash Flows: Geometric Series of Cash Flows 42
2.7 Compounding Frequency 46
3 Equivalence, Loans, and Bonds 59
3.1 Equivalence 60
3.2 Interest Payments and Principal Payments 65
3.3 Bond Investments 70
3.4 Variable Interest Rates 73
4 Present Worth 76
4.1 Comparing Alternatives 77
4.2 Present Worth Calculations 81
4.3 Benefit-Cost Analysis 87
4.4 Discounted Payback Period 99
4.5 Capitalized Worth 106
5 Annual Worth and Future Worth 113
5.1 Annual Worth 114
5.2 Future Worth 119
6 Rate of Return 128
6.1 Internal Rate of Return Calculations 130
6.2 External Rate of Return Calculations 137
7 Replacement Analysis 144
7.1 Cash Flow and Opportunity Cost
Approaches to Replacement Analysis 145
7.2 Optimum Replacement Interval 150
8 Depreciation 155
8.1 Depreciation in Economic Analysis 156
8.2 Straight-Line and Declining Balance
Depreciation Methods 158
8.3 Modified Accelerated Cost Recovery System (MACRS) 165
8.4 MACRS with Bonus Depreciation 171
9 Income Taxes 175
9.1 Corporate Income-Tax Rates 177
9.2 After-Tax Analysis Using Retained Earnings (No Borrowing) 180
9.3 After-Tax Analysis Using Borrowed Capital 188
9.4 Leasing Versus Purchasing Equipment 194
9.5 After-Tax Analysis with Bonus Depreciation 196
9.6 After-Tax Analysis with a Section 179 Expense Deduction 198
10 Inflation 203
10.1 The Meaning and Measure of Inflation 204
10.2 Before-Tax Analysis 208
10.3 After-Tax Analysis 211
10.4 After-Tax Analysis with Borrowed Capital 213
11 Break-Even, Sensitivity, and Risk Analysis 219
11.1 Break-Even Analysis 221
11.2 Sensitivity Analysis 225
11.3 Risk Analysis 231
12 Capital Budgeting 245
12.1 The Classical Capital Budgeting Problem 246
12.2 Capital Budgeting Problem with Indivisible Investments 249
12.3 Capital Budgeting Problem with Divisible Investments 254
13 Obtaining and Estimating Cash Flows 259
13.1 Cost Terminology 261
13.2 Cost Estimation 280
13.3 General Accounting Principles 285
13.4 Cost Accounting Principles 297
13.5 Economic Value Added 303
Appendix A 310
Appendix B 345
Index 349