Engineering Economy 2012

CHAPTER 1
Foundations
of Engineering
Economy
LEARNING OUTCOMES
Purpose: Understand and apply fundamental concepts and use the terminology of engineering economics.
SECTION TOPIC LEARNING OUTCOME
1.1 Description and role • Define engineering economics and describe its
role in decision making.
1.2 Engineering economy study
approach
• Understand and identify the steps in an
engineering economy study.
1.3 Ethics and economics • Identify areas in which economic decisions can
present questionable ethics.
1.4 Interest rate • Perform calculations for interest rates and rates
of return.
1.5 Terms and symbols • Identify and use engineering economic
terminology and symbols.
1.6 Cash flows • Understand cash flows and how to graphically
represent them.
1.7 Economic equivalence • Describe and calculate economic equivalence.
1.8 Simple and compound interest • Calculate simple and compound interest
amounts for one or more time periods.
1.9 MARR and opportunity cost • State the meaning and role of Minimum
Attractive Rate of Return (MARR) and
opportunity costs.
1.10 Spreadsheet functions • Identify and use some Excel functions
commonly applied in engineering economics.