Fundamentals of Engineering Economics

by Park, Chan S.

• ISBN13: 9780130307910
• ISBN10: 0130307912
• Edition: 2nd
• Format: Hardcover
• Copyright: 2008-01-01
• Publisher: Pearson College Div

Summary

For Engineering Economics courses, found in departments of Industrial, Civil, Mechanical, and Electrical Engineering. New from the author of the best-selling Contemporary Engineering Economics text, Fundamentals of Engineering Economics offers a concise, but in-depth coverage of all fundamental topics of Engineering Economics.

Table of Contents

Understanding Money and its Management

Engineering Economic Decisions

Financial Mathematics

Understanding Money Management

Managing Money under Inflation

Evaluating Business and Engineering Assets

Present Worth Analysis

Annual Equivalence Analysis

Rate of Return Analysis

Development of Project Cash Flows

Accounting for Depreciation and Income Taxes

Project Cash Flow Analysis

Handling Project Uncertainty

Special Topics in Engineering Economics

Replacement Decisions

Benefit-Cost Analysis

Understanding Financial Statements

Useful Excel Commands for Economic Analysis

Interest Tables (Discrete Compounding)

Answers for Selected Problems

Table of Contents provided by Publisher. All Rights Reserved.

Excerpts

Why Fundamentals of Engineering Economics? Engineering economics is one of the most practical subject matters in the engineering curriculum, but it is always challenging and an everchanging discipline.Contemporary Engineering Economics(CEE) was first published in 1993, and since then we have tried to reflect changes in the business world in each new edition, along with the latest innovations in education and publishing. These changes have resulted in a better, more complete textbook, but one that is much longer than it was originally intended. This may present a problem: today, covering the textbook in a single term is increasingly difficult. Therefore, we decided to createFundamentals of Engineering Economics(FEE) for those who likeFundamentalsbut think a smaller, more concise textbook would better serve their needs. Goals of the Text This text aims not only to provide sound and comprehensive coverage of the concepts of engineering economics, but also to address the practical concerns of engineering economics. More specifically, this text has the following goals: To build a thorough understanding of the theoretical and conceptual basis upon which the practice of financial project analysis is built. To satisfy the very practical needs of the engineer toward making informed financial decisions when acting as a team member or project manager for an engineering project. To incorporate all critical decision-making tools--including the most contemporary, computer-oriented ones that engineers bring to the task of making informed financial decisions. To appeal to the full range of engineering disciplines for which this course is often required: industrial, civil, mechanical, electrical, computer, aerospace, chemical, and manufacturing engineering, as well as engineering technology. Intended Market and Use This text is intended for use in the introductory engineering economics course. Unlike the larger textbook (CEE), it is possible to cover FEE in a single term, and perhaps even to supplement it with a. few outside readings or cases. Although the chapters in FEE are arranged logically, they are written in a flexible, modular format, allowing instructors to cover the material in a different sequence. Steps Taken to Streamline the Textbook We decided to streamline the textbook by retaining the depth and level of rigor in CEE, while eliminating some less critical topics in each chapter. This resulted in reducing the total number of chapters by four chapters in two steps. Such core topics as the time value of money, measures of investment worth, development of project cash flows, and the relationship between risk and return are still discussed in great detail. First, we eliminated the three chapters on cost accounting, principles of investing, and capital budgeting. We address these issues in other parts of the textbook, but in less depth than was contained in the deleted chapters. Second, we consolidated the two chapters on depreciation and income taxes into one chapter, thus eliminating one more chapter. This consolidation produced some unexpected benefits--students understand depreciation and income taxes in the context of project cash flow analysis, rather than a separate accounting chapter. Third, moving the inflation material from late in the textbook to the end of the equivalence chapters enables students to understand better the nature of inflation in the context of time value of money. Fourth, the project cash flow analysis chapter (Chapter 9) is significantly streamlined--it begins with the definitions and classifications of various cost elements that will be a part of a project cash flow statement. Then, it presents the income tax rate to use in developing a project cash flow statement. It also presents the appropriate interest rate to use in after-tax eco