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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 | |