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| Preface | |
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| Green Content | |
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| Introduction to Engineering Economy | |
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| Introduction | |
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| The Principles of Engineering Economy | |
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| Engineering Economy and the Design Process | |
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| Using Spreadsheets in Engineering Economic Analysis | |
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| Summary | |
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| Cost Concepts and Design Economics | |
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| Cost Terminology | |
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| The General Economic Environment | |
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| Cost-Driven Design Optimization | |
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| Present Economy Studies | |
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| Case Study���The Economics of Daytime Running Lights | |
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| Summary 51 Appendix 2-A Accounting Fundamentals | |
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| Cost-Estimation Techniques | |
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| Introduction | |
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| An Integrated Approach | |
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| Selected Estimating Techniques (Models) | |
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| Parametric Cost Estimating | |
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| Case Study���Demanufacturing of Computers | |
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| Summary | |
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| The Time Value of Money | |
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| Introduction | |
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| Simple Interest | |
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| Compound Interest | |
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| The Concept of Equivalence | |
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| Notation and Cash-Flow Diagrams and Tables | |
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| Relating Present and Future Equivalent Values of Single Cash Flows | |
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| Relating a Uniform Series (Annuity) to Its Present and Future Equivalent Values | |
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| Summary of Interest Formulas and Relationships for Discrete Compounding | |
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| Deferred Annuities (Uniform Series) | |
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| Equivalence Calculations Involving Multiple Interest Formulas | |
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| Uniform (Arithmetic) Gradient of Cash Flows | |
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| Geometric Sequences of Cash Flows | |
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| Interest Rates that Vary with Time | |
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| Nominal and Effective Interest Rates | |
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| Compounding More Often than Once per Year | |
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| Interest Formulas for Continuous Compounding and Discrete Cash Flows | |
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| Case Study���Understanding Economic "Equivalence" | |
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| Summary | |
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| Evaluating a Single Project | |
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| Introduction | |
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| Determining the Minimum Attractive Rate of Return (MARR) | |
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| The Present Worth Method | |
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| The Future Worth Method | |
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| The Annual Worth Method | |
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| The Internal Rate of Return Method | |
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| The External Rate of Return Method | |
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| The Payback (Payout) Period Method | |
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| Case Study���A Proposed Capital Investment to Improve Process Yield | |
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| Summary 211 Appendix 5-A the Multiple Rate of Return Problem with the IRR Method | |
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| Comparison and Selection among Alternatives | |
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| Introduction | |
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| Basic Concepts for Comparing Alternatives | |
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| The Study (Analysis) Period | |
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| Useful Lives Are Equal to the Study Period | |
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| Useful Lives Are Unequal among the Alternatives | |
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| Personal Finances | |
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| Case Study���Ned and Larry's Ice Cream Company | |
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| Post evaluation of Results | |
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| Summary | |
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| Depreciation and Income Taxes | |
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| Introduction | |
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| Depreciation Concepts and Terminology | |
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| The Classical (Historical) Depreciation Methods | |
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| The Modified Accelerated Cost Recovery System | |
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| A Comprehensive Depreciation Example | |
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| Introduction to Income Taxes | |
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| The Effective (Marginal) Corporate Income TaxRate | |
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| Gain (Loss) on the Disposal of an Asset | |
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| General Procedure for Making After-Tax Economic Analyses | |
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| Illustration of Computations of ATCFs | |
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| Economic Value Added | |
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| Summary | |
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| Price Changes and Exchange Rates | |
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| Introduction | |
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| Terminology and Basic Concepts | |
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| Fixed and Responsive Annuities | |
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| Differential Price Changes | |
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| Spreadsheet Application | |
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| Foreign Exchange Rates and Purchasing Power Concepts | |
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| Case Study���Selecting Electric Motors to Power an Assembly Line | |
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| Summary | |
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| Replacement Analysis | |
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| Introduction | |
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| Reasons for Replacement Analysis | |
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| Factors that Must Be Considered in Replacement Studies | |
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| Typical Replacement Problems | |
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| Determining the Economic Life of a New Asset (Challenger) | |
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| Determining the Economic Life of a Defender | |
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| Comparisons in Which the Defender's Useful Life Differs from that of the Challenger | |
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| Retirement without Replacement (Abandonment) | |
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| After-Tax Replacement Studies | |
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| Case Study���Replacement of a Hospital's Emergency Electrical Supply System | |
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| Summary | |
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| Evaluating Projects with the Benefit-Cost Ratio Method | |
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| Introduction | |
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| Perspective and Terminology for Analyzing Public Projects | |
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| Self-Liquidating Projects | |
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| Multiple-Purpose Projects | |
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| Difficulties in Evaluating Public-Sector Projects | |
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| What Interest Rate Should Be Used for Public Projects? | |
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| The Benefit-Cost Ratio Method | |
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| Evaluating Independent Projects by B-C Ratios | |
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| Comparison of Mutually Exclusive Projects by B-C Ratios | |
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| Case Study���Improving a Railroad Crossing | |
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| Summary | |
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| Breakeven and Sensitivity Analysis | |
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| Introduction | |
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| Breakeven Analysis | |
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| Sensitivity Analysis | |
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| Multiple Factor Sensitivity Analysis | |
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| Summary | |
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| Probabilistic Risk Analysis | |
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| Introduction | |
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| Sources of Uncertainty | |
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| The Distribution of Random Variables | |
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| Evaluation of Projects with Discrete Random Variables | |
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| Evaluation of Projects with Continuous Random Variables | |
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| Evaluation of Risk and Uncertainty by Monte Carlo Simulation | |
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| Performing Monte Carlo Simulation with a Computer | |
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| Decision Trees | |
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| Real Options Analysis | |
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| Summary | |
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| The Capital Budgeting Process | |
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| Introduction | |
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| Debt Capital | |
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| Equity Capital | |
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| The Weighted Average Cost of Capital (WACC) | |
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| Project Selection | |
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| Postmortem Review | |
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| Budgeting of Capital Investments and Management Perspective | |
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| Leasing Decisions | |
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| Capital Allocation | |
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| Summary | |
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| Decision Making Considering Multiattributes | |
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| Introduction | |
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| Examples of Multiattribute Decisions | |
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| Choice of Attributes | |
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| Selection of a Measurement Scale | |
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| Dimensionality of the Problem | |
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| Noncompensatory Models | |
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| Compensatory Models | |
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| Summary | |
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| Using Excel to Solve Engineering Economy Problems | |
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| Abbreviations and Notation | |
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| Interest and Annuity Tables for Discrete Compounding | |
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| Interest and Annuity Tables for Continuous Compounding | |
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| Standard Normal Distribution | |
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| Selected References | |
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| Answers to Selected Problems | |
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| Index | |