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| Preface | |
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| Principles of Engineering Economy | |
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| Engineering Economy and the Decision-Making Process | |
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| The Engineer | |
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| Engineering Economy | |
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| Engineering Economic Decisions | |
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| The Decision-Making Process | |
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| The Engineering Design Process | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Application Questions | |
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| Fundamentals of Engineering Exam Prep | |
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| Cash Flows and the Time Value of Money | |
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| Cash Flows and Cash Flow Diagrams | |
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| Using Spreadsheets to Represent Cash Flows | |
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| Spreadsheet Fundamentals | |
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| Spreadsheet Usage | |
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| The Time Value of Money | |
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| Interest and Interest Rates | |
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| Simple Interest | |
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| Compound Interest | |
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| Nominal and Effective Interest Rates | |
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| Nominal Interest Rates | |
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| Effective Interest Rates | |
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| Comparing Interest Rates | |
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| Cash Flow Timing and the Interest Rate | |
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| Compounding Is More Frequent than Cash Flows | |
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| Compounding Is Less Frequent than Cash Flows | |
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| Inflation and Purchasing Power | |
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| Measuring Inflation | |
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| Cash Flows as Real or Current Dollars | |
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| Market and Inflation-Free Interest Rates | |
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| Real- and Current-Dollar Cash Flow Analysis | |
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| Exchange Rates and Cash Flow Analysis | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Interest Formulas | |
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| Compound Amount Factors | |
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| Single-Payment Analysis | |
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| Equal-Payment Series Analysis | |
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| Arithmetic Gradient Series Analysis | |
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| Geometric Gradient Series Analysis | |
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| Present-Worth Factors | |
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| Single-Payment Analysis | |
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| Equal-Payment Series Analysis | |
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| Arithmetic Gradient Series Analysis | |
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| Geometric Gradient Series Analysis | |
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| Equal-Payment Factors | |
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| Single-Payment Analysis: Sinking-Fund Factor | |
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| Single-Payment Analysis: Capital-Recovery Factor | |
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| Arithmetic Gradient Series Analysis | |
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| Geometric Gradient Series Factor | |
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| Summary of Interest Factors | |
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| Using Multiple Factors in Analysis | |
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| Discrete Payments and Continuous Compounding | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Economic Equivalence | |
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| Economic Equivalence Properties | |
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| Equivalence Involving the Interest Rate | |
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| Equivalence Involving the Horizon | |
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| Interest Factor Behavior | |
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| Examples of Equivalence: Raising Capital | |
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| Loans | |
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| Bonds | |
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| Stocks | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Decision-Making Preliminaries | |
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| Problem or Opportunity Definition | |
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| Defining Problems | |
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| Recognizing Opportunities | |
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| Opportunities and Problems | |
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| The Definition | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Application Questions | |
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| Fundamentals of Engineering Exam Prep | |
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| Generating and Designing Feasible Solution Alternatives | |
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| Generating Alternatives | |
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| Working Alone | |
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| Working in a Group | |
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| The Delphi Method | |
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| The Nominal Group Process | |
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| The Do-Nothing Alternative | |
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| Reduction to a Feasible Set of Alternatives | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Application Questions | |
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| Fundamentals of Engineering Exam Prep | |
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| Developing Cash Flows and Gathering Information | |
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| Life-Cycle Costs and Revenues | |
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| Priorities in Estimation | |
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| Estimation Techniques | |
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| Unit Method | |
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| Index Method | |
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| Power Law and Sizing Model | |
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| The Learning Curve | |
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| Curve Fitting | |
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| Ranges of Estimates | |
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| Generating the Cash Flow Diagram | |
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| Choosing an Interest Rate | |
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| Weighted-Average Cost of Capital | |
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| Growth Rate and Opportunity Cost | |
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| Choosing a Study Period | |
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| Additional Information Gathering | |
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| Sources of Data | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Questions | |
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| Fundamentals of Engineering Exam Prep | |
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| Developing After-Tax Cash Flows | |
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| Taxation | |
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| Taxes on Ordinary Income | |
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| Federal Tax Rates | |
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| Effective Tax Rates | |
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| Depreciation and Book Value | |
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| Straight-Line Depreciation | |
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| Declining-Balance Depreciation | |
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| Declining Balance Switching to Straight-Line Depreciation | |
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| MACRS Depreciation | |
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| Choosing a Depreciation Method | |
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| Historical Methods of Depreciation | |
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| Taxes on Nonordinary Income | |
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| Retiring an Asset | |
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| Replacing an Asset | |
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| Capital Gains | |
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| Notable Exceptions and Adjustments to Taxable Income | |
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| Units-of-Depletion Method of Depreciation | |
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| Losses from Operations or from Sales of Assets | |
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| Investment Credits | |
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| Amortization | |
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| After-Tax Cash Flows | |
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| Examining the Real Decision Problems | |
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| After-Tax MARR | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Making the Decision for a Single Project | |
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| Deterministic Evaluation | |
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| Absolute Measures of Worth | |
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| Present Worth | |
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| Future Worth | |
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| Annual Equivalent Worth | |
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| Market Value Added | |
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| Relative Measures of Worth | |
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| Internal Rate of Return | |
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| External Rate of Return (Modified Internal Rate of Return) | |
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| Benefit-Cost Ratio | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Considering Risk | |
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| Payback Period | |
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| Payback Period with Interest | |
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| Project Balance | |
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| Break-Even Analysis | |
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| Sensitivity Analysis | |
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| Single-Parameter Analysis | |
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| Multiple-Parameter Analysis | |
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| Scenario Analysis | |
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| Probabilistic Analysis | |
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| Probabilistic Scenario Analysis | |
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| Simulation Analysis | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Considering Noneconomic Factors and Multiattributes | |
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| Noneconomic Factors | |
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| Including Noneconomic Factors in Analysis | |
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| Multiattribute Analysis | |
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| Judgment in Decision Making | |
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| Writing the Business Case | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Making the Decision for Multiple Projects | |
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| Deterministic Evaluation | |
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| Classifying Engineering Projects | |
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| Forming Mutually Exclusive Alternatives | |
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| Evaluation of Revenue Projects with Equal Lives | |
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| Total Investment Analysis | |
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| Incremental Investment Analysis | |
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| Evaluation of Revenue Projects with Unequal Lives | |
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| Evaluation of Service Projects with Equal Lives | |
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| Evaluation of Service Projects with Unequal Lives | |
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| Mixing Revenue and Service Projects | |
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| Solutions to Large-Scale Applications | |
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| Integer Programming Approach | |
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| Heuristic Methods: Project-Ranking Approaches | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Considering Options in Time | |
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| Decision Networks | |
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| Decision Trees | |
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| Single-Stage Decision Tree | |
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| Two-Stage Decision Tree | |
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| Calculating Conditional Probabilities | |
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| Rollback Solution Procedure | |
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| Multistage Decision Trees | |
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| Real Options | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Multicriteria Evaluation | |
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| Sensitivity and Break-Even Analysis | |
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| Simulation Analysis | |
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| Project Elimination Methods | |
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| Dominance and Efficient Frontier Analysis | |
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| Minimum-Threshold Analysis | |
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| Project-Ranking Methods | |
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| Considering Noneconomic Factors | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Postimplementation Analysis | |
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| Postimplementation and Evaluation | |
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| Sunk Costs Revisited | |
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| Tracking an Investment | |
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| Error Analysis | |
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| Cash Flow Charting | |
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| Considering Dynamic Options | |
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| Updating the Forecast | |
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| Maintaining a Database | |
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| Cost Accounting | |
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| Balance Sheet | |
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| Income Statement | |
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| Cash Flow Statement | |
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| Activity-Based Costing | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Abandonment and Replacement Analysis | |
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| Abandonment Analysis | |
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| Dynamic Deterministic Evaluation | |
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| Probabilistic Evaluation | |
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| Replacement Analysis | |
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| Considering Deterioration | |
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| Considering Technological Change | |
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| After-Tax Issues in Replacement Analysis | |
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| Examining the Real Decision Problems | |
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| Key Points | |
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| Further Reading | |
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| Questions and Problems | |
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| Concept Questions | |
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| Drill Problems | |
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| Application Problems | |
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| Fundamentals of Engineering Exam Prep | |
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| Appendix | |
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| Solutions to Fundamentals of Engineering Exam Prep Questions | |
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| Interest Rate Factors for Discrete Compounding | |
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| Index | |