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Engineering economics, previously known as engineering economy, is a subset of economics for application to engineering projects. Engineers seek solutions to problems, and the economic viability of each potential solution is normally considered along with the technical aspects. Face-to-face trading interactions among on the New York Stock Exchange trading floor Economics, as a social science, studies the production, distribution, and consumption of commodities. ...
Look up engineer in Wiktionary, the free dictionary. ...
In U.S. undergraduate engineering curricula, engineering economics is often a required course. It is a topic on the Fundamentals of Engineering examination, and questions might also be asked on the Principles and Practice of Engineering examination; both are part of the Professional Engineering registration process. Engineering is the application of scientific and mathematical principles to develop economical solutions to technical problems, creating products, facilities, and structures that are useful to people. ...
In the United States, the Fundamentals of Engineering exam (also known as the FE exam) is the first of two examinations engineers must pass in order to be certified as a professional engineer. ...
Considering the time value of money is central to most engineering economic analyses. Cash flows are discounted using an interest rate, i, except in the most basic economic studies. The time value of money (TVM) is a necessary concept of finance that allows us to equate (PV) the value of a dollar now to a future dollar : the value of a discount bond. ...
In finance, cash flow refers to the amounts of cash being received and spent by a business during a defined period of time, sometimes tied to a specific project. ...
An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. ...
For each problem, there are usually many possible alternatives. One option that must be considered in each analysis, and is often the choice, is the do nothing alternative. The opportunity cost of making one choice over another must also be considered. There are also noneconomic factors to be considered, like color, style, public image, etc., and are called attributes.[1]
Costs as well as revenues are considered, for each alternative, for an analysis period that is either a fixed number of years or the estimated life of the project. The salvage value is often forgotten, but is important, and is either the net cost or revenue for decommissioning the project.
Some other topics that may be addressed in engineering economics are inflation, uncertainty, replacements, depreciation, resource depletion, taxes, tax credits, accounting, cost estimations, or capital financing. // Relation between uncertainty, probability and risk In his seminal work Risk, Uncertainty, and Profit, Frank Knight (1921) established the important distinction between risk and uncertainty: … Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated. ...
Declining-balance depreciation of a $50,000 asset with $6,500 salvage value over 20 years. ...
Depletion is the process of running down or reducing the total resource available. ...
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This article or section should be merged with tax credit Tax credits are credits on tax payable given by the government for specific reasons. ...
It has been suggested that Accounting scholarship be merged into this article or section. ...
Capital has a number of related meanings in economics, finance and accounting. ...
Typical analyses
- Simple payback (SPB)
- Discounted payback (DPB)
- Present worth (PW)
- Annual worth (AW)
- Future worth (FW)
- Capitalized worth (CW)
- Internal rate of return (IRR)
- External rate of return (ERR)
- Minimum attractive rate of return (MARR)
- Life cycle cost (LCC)
- Life cycle savings (LCS)
- Benefit to cost ratio (B/C)
The internal rate of return (IRR) is defined as the discount rate that gives a net present value (NPV) of zero. ...
A life cycle cost analysis calculates the cost of a system or product over its entire life span. ...
Other fundamental engineering topics Materials science includes those parts of chemistry and physics that deal with the properties of materials. ...
Statics is the branch of physics concerned with physical systems in static equilibrium, that is, in a state where the relative positions of subsystems do not vary over time, or where components and structures are at rest under the action of external forces of equilibrium. ...
The word dynamics can refer to: in physics, a branch of mechanics; see dynamics (mechanics). ...
It has been suggested that Tensile strength be merged into this article or section. ...
Thermodynamics (from the Greek thermos meaning heat and dynamics meaning power) is a branch of physics that studies the effects of changes in temperature, pressure, and volume on physical systems at the macroscopic scale by analyzing the collective motion of their particles using statistics. ...
Fluid dynamics is the subdiscipline of fluid mechanics that studies fluids (liquids and gases) in motion. ...
In thermal science, heat transfer is the passage of thermal energy from a hot to a cold body. ...
A resistive circuit is a circuit containing only resistors, perfect current sources, and perfect voltage sources. ...
References - ^ Engineering Economy, 11th Ed., Sullivan, Bontadelli, and Wicks, Prentice-Hall, New York, 2000
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