Basics of Engineering Economy

Abstract

T his text covers the basic techniques and applications of engineering economy for all disciplines in the engineering profession. Its design and organization allow flexibility in topical coverage for any undergraduate curriculum, varying from ABET-accredited engineering and engineering technology programs to preengineering courses, to postgraduate and research-oriented programs. The text is adaptable to resident instruction and distance learning environments. The writing style emphasizes brief, crisp coverage of the principle or technique discussed in order to reduce the time taken to present and grasp the essentials. A wide variety of examples, spreadsheet solutions, end-of-chapter problems, and test review/FE exam questions are included in every chapter. OBJECTIVE AND USES OF TEXT The objective of the text is to explain and demonstrate the principles and techniques of engineering economic analysis as applied in different fields of engineering. Interest factors and spreadsheet functions are used to perform equivalency calculations on estimated cash flows that account for the time value of money and inflation. Separate chapters discuss and illustrate all of the techniques used to evaluate a single project or to select from multiple alternatives. Mutually exclusive and independent projects are covered throughout the text. Students should have attained a sophomore or higher level to thoroughly understand the engineering context of the techniques and problems addressed. A background in calculus is not necessary; however, a basic familiarity with engineering terminology in a student’s own engineering discipline makes the material more meaningful and, therefore, easier to learn and apply. The text may be used in a wide variety of ways in an undergraduate course— from a few weeks that introduce the basics of engineering economics, to a full twoor three-semester/quarter credit hour course. For senior students who have little or no background in engineering economic analysis in earlier courses, this text provides an excellent senior-level introduction as the senior project is designed and developed. Engineering economy is one of the few engineering topics that is equally applicable to both individuals and corporate and government employees. It can analyze personal finances and investments in a fashion similar to corporate project finances. Students will find this text serves well as a reference throughout their courses and