HW3_Cost Concepts and Design Economics_EngEconomics

Cost concepts refer to the various types of costs that are involved in a project, including direct costs (such as labor and materials) and indirect costs (such as overhead and administration expenses). These costs are analyzed and quantified in order to determine the total cost of a project. Understanding cost concepts is important for engineers because it allows them to accurately estimate the costs associated with a project and identify areas where cost savings can be made. Design economics, on the other hand, involves evaluating different design options based on their costs and benefits. This includes conducting engineering economic analyses, such as net present value (NPV) analysis, internal rate of return (IRR) analysis, and payback period analysis, to determine the financial feasibility of different design options. By evaluating design options based on their costs and benefits, engineers can make informed decisions about which option offers the best value for money.