Fundamentals of Engineering Economic Analysis
1st Edition
Published on 12. August 2013
Loose-leaf edition
624 pages
978-1-118-63377-9 (ISBN)
Description
Fundamentals of Engineering Economic Analysis, 1st Edition Binder Ready Version provides streamlined topical coverage with a modern and pedagogically-rich presentation. This text features a wealth of real-world vignettes to reinforce how students will use economics in their future careers as well as to drive student motivation and interest. An enlightening approach combined with strong digital offerings make the course manageable, equipping students with the knowledge they need as future engineers. This text is an unbound, binder-ready version.
More details
Language
English
Place of publication
New York
United States
Target group
College/higher education
Product notice
Loose leaf - sheets only
Dimensions
Height: 254 mm
Width: 201 mm
Thickness: 25 mm
Weight
1102 gr
ISBN-13
978-1-118-63377-9 (9781118633779)
Copyright in bibliographic data and cover images is held by Nielsen Book Services Limited or by the publishers or by their respective licensors: all rights reserved.
Schweitzer Classification
Persons
Kim LaScola Needy is the head of the industrial engineering department and Twenty-First Century Professor in Engineering at the University of Arkansas. After receiving her bachelor's degree from the University of Pittsburgh, Dr. Needy worked in the field of information technology at PPG Industries and Boeing, earning a master's degree from the University of Pittsburgh and then a Ph.D. from Wichita State.
Dr. Needy's research interests include engineering management, sustainability and supply chain optimization.?Her research has led to 95 refereed publications and recognition by societies such as the Institute of Industrial Engineers, which has named her a Fellow.
Kellie Grasman is a Lecturer at Missouri University of Science and Technology. She reieved her MS, ME, and MBA at the University of Michigan Missouri Science and Technology.
Dr. Needy's research interests include engineering management, sustainability and supply chain optimization.?Her research has led to 95 refereed publications and recognition by societies such as the Institute of Industrial Engineers, which has named her a Fellow.
Kellie Grasman is a Lecturer at Missouri University of Science and Technology. She reieved her MS, ME, and MBA at the University of Michigan Missouri Science and Technology.
Content
CHAPTER 1 An Overview of Engineering Economic Analysis 3
Learning Objectives 4
Introduction 4
1-1 Time Value of Money 4
1-2 Engineering Economy Principles 7
1-3 Economic Justification of Capital Investments 10
Summary 15
Key Terms 16
FE-Like Problems 17
Problems 18
CHAPTER 2 Time Value of Money Calculations 23
Learning Objectives 23
Introduction 23
2-1 Cash Flow Diagrams 24
2-2 Single Cash Flows 26
2-3 Multiple Cash Flows 35
2-4 Compounding Frequency 55
Summary 62
Key Terms 66
FE-Like Problems 67
Problems 69
CHAPTER 3 Equivalence, Loans, and Bonds 93
Learning Objectives 93
Introduction 93
3-1 Equivalence 94
3-2 Interest Payments and Principal Payments 100
3-3 Bond Investments 106
3-4 Variable Interest Rates 110
3-5 Annual Percentage Rate 111
Summary 113
Key Terms 114
FE-Like Problems 114
Problems 116
CHAPTER 4 Present Worth 125
Learning Objectives 125
Introduction 126
4-1 Comparing Alternatives 126
4-2 Present Worth Calculations 130
4-3 Benefit-Cost Analysis 137
4-4 Discounted Payback Period 144
4-5 Capitalized Worth 152
Summary 157
Key Terms 159
FE-Like Problems 159
Problems 162
CHAPTER 5 Annual Worth and Future Worth 179
Learning Objectives 179
Introduction 179
5-1 Annual Worth 180
5-2 Future Worth 185
Summary 194
Key Terms 194
FE-Like Problems 195
Problems 196
CHAPTER 6 Rate of Return 213
Learning Objectives 213
Introduction 214
6-1 Internal Rate of Return Calculations 215
6-2 External Rate of Return Calculations 224
Summary 231
Key Terms 232
FE-Like Problems 232
Problems 235
CHAPTER 7 Replacement Analysis 257
Learning Objectives 258
Introduction 258
7-1 Fundamentals of Replacement Analysis 258
7-2 Cash Flow and Opportunity Cost Approaches 261
7-3 Optimum Replacement Interval 264
Summary 268
Key Terms 269
FE-Like Problems 269
Problems 271
CHAPTER 8 Depreciation 285
Learning Objectives 286
Introduction 286
8-1 The Role of Depreciation in Economic Analysis 287
8-2 Language of Depreciation 288
8-3 Straight-Line and Declining Balance Depreciation Methods 289
8-4 Modified Accelerated Cost Recovery System (MACRS) 296
Summary 301
Key Terms 303
FE-Like Problems 303
Problems 305
CHAPTER 9 Income Taxes 317
Learning Objectives 317
Introduction 317
9-1 Corporate Income Tax Rates 319
9-2 After-Tax Analysis Using Retained Earnings (No Borrowing) 322
9-3 After-Tax Analysis Using Borrowed Capital 330
9-4 Leasing versus Purchasing Equipment 336
Summary 338
Key Terms 340
FE-Like Problems 340
Problems 342
CHAPTER 10 Inflation 359
Learning Objectives 359
Introduction 360
10-1 The Meaning and Measure of Inflation 360
10-2 Before-Tax Analysis 364
10-3 After-Tax Analysis 367
10-4 After-Tax Analysis with Borrowed Capital 369
Summary 373
Key Terms 375
FE-Like Problems 375
Problems 377
CHAPTER 11 Break-Even, Sensitivity, and Risk Analysis 391
Learning Objectives 391
Introduction 392
11-1 Break-Even Analysis 393
11-2 Sensitivity Analysis 398
11-3 Risk Analysis 405
Summary 418
Key Terms 419
FE-Like Problems 419
Problems 421
CHAPTER 12 Capital Budgeting 437
Learning Objectives 438
Introduction 438
12-1 The Classical Capital Budgeting Problem 438
12-2 Capital Budgeting Problem with Indivisible Investments 440
12-3 Capital Budgeting Problem with Divisible Investments 446
12-4 Practical Considerations in Capital Budgeting 449
Summary 450
Key Terms 451
FE-Like Problems 451
Problems 453
APPENDIX A
a Single Sums, Uniform Series, and Gradient Series Interest Factors 471
b Geometric Series Present Worth Interest Factors 496
c Geometric Series Future Worth Interest Factors 501
APPENDIX B
Obtaining and Estimating Cash Flows 507
B-1 Introduction 506
B-2 Cost Terminology 508
B-3 Cost Estimation 530
B-4 General Accounting Principles 537
B-5 Cost Accounting Principles 550
Summary 561
FE-Like Problems 562
Problems 563
ANSWERS TO SELECTED EVEN NUMBERED PROBLEMS 577
INDEX 599
Learning Objectives 4
Introduction 4
1-1 Time Value of Money 4
1-2 Engineering Economy Principles 7
1-3 Economic Justification of Capital Investments 10
Summary 15
Key Terms 16
FE-Like Problems 17
Problems 18
CHAPTER 2 Time Value of Money Calculations 23
Learning Objectives 23
Introduction 23
2-1 Cash Flow Diagrams 24
2-2 Single Cash Flows 26
2-3 Multiple Cash Flows 35
2-4 Compounding Frequency 55
Summary 62
Key Terms 66
FE-Like Problems 67
Problems 69
CHAPTER 3 Equivalence, Loans, and Bonds 93
Learning Objectives 93
Introduction 93
3-1 Equivalence 94
3-2 Interest Payments and Principal Payments 100
3-3 Bond Investments 106
3-4 Variable Interest Rates 110
3-5 Annual Percentage Rate 111
Summary 113
Key Terms 114
FE-Like Problems 114
Problems 116
CHAPTER 4 Present Worth 125
Learning Objectives 125
Introduction 126
4-1 Comparing Alternatives 126
4-2 Present Worth Calculations 130
4-3 Benefit-Cost Analysis 137
4-4 Discounted Payback Period 144
4-5 Capitalized Worth 152
Summary 157
Key Terms 159
FE-Like Problems 159
Problems 162
CHAPTER 5 Annual Worth and Future Worth 179
Learning Objectives 179
Introduction 179
5-1 Annual Worth 180
5-2 Future Worth 185
Summary 194
Key Terms 194
FE-Like Problems 195
Problems 196
CHAPTER 6 Rate of Return 213
Learning Objectives 213
Introduction 214
6-1 Internal Rate of Return Calculations 215
6-2 External Rate of Return Calculations 224
Summary 231
Key Terms 232
FE-Like Problems 232
Problems 235
CHAPTER 7 Replacement Analysis 257
Learning Objectives 258
Introduction 258
7-1 Fundamentals of Replacement Analysis 258
7-2 Cash Flow and Opportunity Cost Approaches 261
7-3 Optimum Replacement Interval 264
Summary 268
Key Terms 269
FE-Like Problems 269
Problems 271
CHAPTER 8 Depreciation 285
Learning Objectives 286
Introduction 286
8-1 The Role of Depreciation in Economic Analysis 287
8-2 Language of Depreciation 288
8-3 Straight-Line and Declining Balance Depreciation Methods 289
8-4 Modified Accelerated Cost Recovery System (MACRS) 296
Summary 301
Key Terms 303
FE-Like Problems 303
Problems 305
CHAPTER 9 Income Taxes 317
Learning Objectives 317
Introduction 317
9-1 Corporate Income Tax Rates 319
9-2 After-Tax Analysis Using Retained Earnings (No Borrowing) 322
9-3 After-Tax Analysis Using Borrowed Capital 330
9-4 Leasing versus Purchasing Equipment 336
Summary 338
Key Terms 340
FE-Like Problems 340
Problems 342
CHAPTER 10 Inflation 359
Learning Objectives 359
Introduction 360
10-1 The Meaning and Measure of Inflation 360
10-2 Before-Tax Analysis 364
10-3 After-Tax Analysis 367
10-4 After-Tax Analysis with Borrowed Capital 369
Summary 373
Key Terms 375
FE-Like Problems 375
Problems 377
CHAPTER 11 Break-Even, Sensitivity, and Risk Analysis 391
Learning Objectives 391
Introduction 392
11-1 Break-Even Analysis 393
11-2 Sensitivity Analysis 398
11-3 Risk Analysis 405
Summary 418
Key Terms 419
FE-Like Problems 419
Problems 421
CHAPTER 12 Capital Budgeting 437
Learning Objectives 438
Introduction 438
12-1 The Classical Capital Budgeting Problem 438
12-2 Capital Budgeting Problem with Indivisible Investments 440
12-3 Capital Budgeting Problem with Divisible Investments 446
12-4 Practical Considerations in Capital Budgeting 449
Summary 450
Key Terms 451
FE-Like Problems 451
Problems 453
APPENDIX A
a Single Sums, Uniform Series, and Gradient Series Interest Factors 471
b Geometric Series Present Worth Interest Factors 496
c Geometric Series Future Worth Interest Factors 501
APPENDIX B
Obtaining and Estimating Cash Flows 507
B-1 Introduction 506
B-2 Cost Terminology 508
B-3 Cost Estimation 530
B-4 General Accounting Principles 537
B-5 Cost Accounting Principles 550
Summary 561
FE-Like Problems 562
Problems 563
ANSWERS TO SELECTED EVEN NUMBERED PROBLEMS 577
INDEX 599