Engineering Economy, 16th Edition by William G. Sullivan and Elin M. Wicks

701 Pages·2015·18.84 MB·English

Sixteenth Edition
Abbreviations and Notation Summary
CHAPTER 4
APR annualpercentagerate(nominalinterest)
EOY endofyear
f a geometric change from one time period to the next in cash flows
¯
orequivalentvalues
i effectiveinterestrateperinterestperiod
r nominalinterestrateperperiod(usuallyayear)
CHAPTER 5
AW(i%) equivalent uniform annual worth, computed at i% interest, of one
ormorecashflows
CR(i%) equivalentannualcostofcapitalrecovery,computedati%interest
CW(i%) capitalizedworth(apresentequivalent),computedati%interest
FW(i%) future equivalent worth, calculated at i% interest, of one or more
cashflows
EUAC(i%) equivalentuniformannualcost,calculatedati%interest
IRR internalrateofreturn,alsodesignatedi%
MARR minimumattractiverateofreturn
N lengthofthestudyperiod(usuallyyears)
PW(i%) present equivalent worth, computed at i% interest, of one or more
cashflows
CHAPTER 6
!(B A) incremental net cash flow (difference) calculated from the cash flow
−
ofAlternative B minus the cash flow ofAlternative A (read: delta B
minusA)
CHAPTER 7
ATCF after-taxcashflow
BTCF before-taxcashflow
EVA economicvalueadded
MACRS modifiedacceleratedcostrecoverysystem
NOPAT netoperatingprofitaftertaxes
WACC tax-adjustedweightedaveragecostofcapital
CHAPTER 8
A$ actual(current)dollars
f generalinflationrate
R$ real(constant)dollars
CHAPTER 9
EUAC equivalentuniformannualcost
TC total(marginal)costforyeark
k
CHAPTER 12
E(X) meanofarandomvariable
f(x) probabilitydensityfunctionofacontinuousrandomvariable
p(x) probabilitymassfunctionofadiscreterandomvariable
SD(X) standarddeviationofarandomvariable
V(X) varianceofarandomvariable
CHAPTER 13
CAPM capitalassetpricingmodel
R risk-freerateofreturn
F
SML securitymarketline
X binarydecisionvariableincapitalallocationproblems
j
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ENGINEERING
ECONOMY
Sixteenth Edition

E E
NGINEERING CONOMY
SIXTEENTH EDITION
WILLIAM G. SULLIVAN ELIN M. WICKS C. PATRICK KOELLING
Virginia Polytechnic Institute Wicks andAssociates,L.L.P. Virginia Polytechnic Institute
and State University and State University
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LibraryofCongressCataloging-in-PublicationData
Sullivan,WilliamG.,1942–
Engineeringeconomy/WilliamG.Sullivan,ElinM.Wicks,C.PatrickKoelling.—Sixteenthedition.
pagescm
ISBN-13:978-0-13-343927-4
ISBN-10:0-13-343927-5
1. Engineeringeconomy—Textbooks. I. Wicks,ElinM. II. Koelling,C.Patrick,1953- III. Title.
TA177.4.S85 2014
658.15—dc23 2013028782
10 9 8 7 6 5 4 3 2 1
ISBN-13: 978-0-13-343927-4
ISBN-10: 0-13-343927-5
CONTENTS
Preface xi
Green Content xviii
CHAPTER1
Introduction to Engineering Economy 1
1.1 Introduction 2
1.2 ThePrinciplesofEngineeringEconomy 3
1.3 EngineeringEconomyandtheDesignProcess 7
1.4 UsingSpreadsheetsinEngineeringEconomicAnalysis 15
1.5 TryYourSkills 15
1.6 Summary 16
CHAPTER2
Cost Concepts and Design Economics 20
2.1 CostTerminology 21
2.2 TheGeneralEconomicEnvironment 27
2.3 Cost-DrivenDesignOptimization 38
2.4 PresentEconomyStudies 43
2.5 CaseStudy—TheEconomicsofDaytimeRunningLights 49
2.6 TryYourSkills 51
2.7 Summary 52
Appendix2-A AccountingFundamentals 60
CHAPTER3
Cost-Estimation Techniques 67
3.1 Introduction 68
3.2 AnIntegratedApproach 70
3.3 SelectedEstimatingTechniques(Models) 78
3.4 ParametricCostEstimating 83
3.5 CaseStudy—DemanufacturingofComputers 94
3.6 ElectronicSpreadsheetModeling:LearningCurve 96
3.7 TryYourSkills 98
3.8 Summary 100
v