Engineering Economics (Econ343)

The three most commonly used profitability measures are present worth (PW), future worth (FW), and annual worth (AW). Each measure provides a different perspective on the profitability of an investment, and engineers can use them in combination to make informed decisions about the use of resources. Present worth (PW) is the value of all future cash flows of an investment at the present time. Engineers use the present worth factor to calculate the present worth of an investment, taking into ac...

A deferred annuity is an annuity that does not begin making payments until a specified date in the future. In engineering economy, deferred annuities are often used to evaluate investments in which cash inflows or outflows are expected to occur at a future date. Engineers use present worth, future worth, annual worth, and nominal rate factors to calculate the value of deferred annuities and compare them to other investment options. In more complicated equivalence calculations, engineers may u...

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...

It discusses the different methods of depreciation (such as straight-line, declining balance, and sum-of-the-years' digits), how to calculate depreciation expenses, and the impact of different depreciation methods on income taxes. The chapter also covers the basics of income taxes, including the different types of taxes and tax rates, tax deductions and credits, and how to calculate income tax expenses.