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Preface | |
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Introduction to Engineering Economy | |
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Engineering and Engineering Economy | |
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Engineering and Science | |
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The Bi-Environmental Nature of Engineering | |
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Physical and Economic Efficiency | |
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The Engineering Process | |
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Engineering for Economic Competitiveness | |
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Engineering Economy and the Engineer | |
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Key Points | |
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Questions | |
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Some Economic and Cost Concepts | |
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Concepts of Value and Utility | |
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Consumer and Producer Goods | |
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Economic Aspects of Exchange | |
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Classifications of Cost | |
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Life-Cycle Cost | |
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Interest and Interest Rate | |
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The Time Value of Money | |
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The Earning Power of Money | |
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The Purchasing Power of Money | |
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Key Points | |
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Questions | |
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Interest Formulas and Equivalence | |
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Interest Formulas | |
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Simple and Compound Interest | |
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Describing Cash Flows Over Time | |
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Interest Formulas (Discrete Compounding, Discrete Payments) | |
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Interest-Formula Relationships | |
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Compounding Frequency Considerations | |
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Interest Formulas (Continuous Compounding, Discrete Payments) | |
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Summary of Interest Formulas | |
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Problems | |
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Calculations of Economic Equivalence | |
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The Meaning of Equivalence | |
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Equivalence Calculations Involving a Single Factor | |
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Equivalence Calculations Involving Cash Flows | |
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Principles of Equivalence | |
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Equivalence Calculations with More Frequent Compounding | |
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Equivalence Calculations Involving Bonds | |
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Equivalence Calculations Involving Loans | |
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Equivalence Calculations Involving Working Capital | |
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Key Points | |
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Problems | |
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Equivalence Involving Inflation | |
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Measures of Inflation and Deflation | |
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The Inflation Rate | |
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Considering the Effects of Inflation | |
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Analyzing Inflation in Investments | |
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Key Points | |
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Problems | |
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Economic Analysis of Alternatives | |
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Bases for Comparison of Alternatives | |
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Present Worth | |
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Annual Equivalent | |
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Future Worth | |
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Internal Rate of Return | |
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Payback Period | |
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Capitalized Equivalent Amount | |
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Capital Recovery with Return | |
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Project Balance | |
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Key Points | |
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Problems | |
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Decision Making Among Alternatives | |
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Types of Investment Proposals | |
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Forming Mutually Exclusive Alternatives | |
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Elements of Decision Criteria | |
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Present Worth on Incremental Investment | |
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IRR on Incremental Investment | |
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Comparisons Based on Total Investment | |
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Comparing Alternatives with Unequal Lives | |
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Key Points | |
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Problems | |
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Evaluating Production Operations | |
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Characteristics of Production Operations | |
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Break-Even Analysis | |
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Operation and Production Decisions | |
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Economic Operation of Equipment | |
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Models for Procurement Operations | |
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Key Points | |
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Problems | |
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Evaluating Replacement Alternatives | |
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The General Nature of Replacement Analysis | |
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Describing Replacement Alternatives | |
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Replacement Analysis for Unequal Lives | |
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The Economic Life of an Asset | |
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Replacement Assumptions and Decisions | |
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Retirement or Abandonment Decisions | |
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Examples of Replacement Problems | |
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Key Points | |
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Problems | |
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Evaluating Public Activities | |
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General Welfare Aim of Government | |
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The Nature of Public Activities | |
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Financing Public Activities | |
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Public Activities and Engineering Economy | |
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Benefit-Cost Analysis | |
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Identifying Benefits, Disbenefits, and Costs | |
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Cost-Effectiveness Analysis | |
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Key Points | |
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Questions and Problems | |
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Accounting, Depreciation, and Income Taxes | |
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Accounting and Depreciation Accounting | |
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General Accounting | |
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Cost Accounting | |
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Depreciation | |
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Accounting for the Depreciation of Capital Assets | |
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Basic Depreciation Methods | |
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Modified Accelerated Cost Recovery System (MACRS) | |
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Units-of-Production Depreciation | |
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Depletion | |
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Key Points | |
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Questions and Problems | |
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Income Taxes in Economic Analysis | |
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Relation of Income Taxes to Profit | |
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Federal Income Tax for Corporations | |
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Effective Income-Tax Rates | |
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Interest and Income Taxes | |
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Depreciation and Income Taxes | |
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Gain or Loss on Disposition of Depreciable Assets | |
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Tax Credits | |
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Depletion and Income Taxes | |
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Calculating After-Tax Cash Flows | |
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Evaluation of Financing Methods Using After-Tax Cash Flows | |
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Capital Gains in After-Tax Cash Flows | |
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Inflation and its Effects on After-Tax Flows | |
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After-Tax Analysis of Replacements | |
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Key Points | |
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Problems | |
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Estimates, Risk, and Uncertainty | |
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Estimating Economic Elements | |
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The Elements to Be Estimated | |
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Cost Estimating Methods | |
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Adjustment of Cost Data | |
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Cost-Estimating Relationships | |
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Estimating and Allocating Indirect Costs | |
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Accounting Data in Estimating | |
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Judgment in Estimating | |
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Key Points | |
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Questions and Problems | |
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Estimates and Decision Making | |
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An Example Decision Based upon Estimates | |
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Allowances for Uncertainty in Estimates | |
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Considering a Range of Estimates | |
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Sensitivity Analysis | |
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Key Points | |
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Questions and Problems | |
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Decisions Under Risk and Uncertainty | |
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Criteria for Decisions Under Risk | |
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Expected-Value Decision Making | |
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Expectation Variance Decision Making | |
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Monte Carlo Analysis | |
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Decision Trees in Decision Making | |
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Decisions Under Uncertainty | |
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Key Points | |
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Problems | |
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Decisions Involving Multiple Criteria | |
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Multiple Criteria Considerations | |
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Direct Ranking Methods | |
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Systematic Elimination Methods | |
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Weighting Methods of Evaluation | |
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Decision Evaluation Display | |
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Decision Evaluation Display Examples | |
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Summary: Making the Decision | |
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Key Points | |
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Questions and Problems | |
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Appendices | |
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Interest Factors for Discrete Compounding | |
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Effective Interest Rates Corresponding to Nominal Rate r | |
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Selected References | |
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Index | |