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Engineering Economics
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Terms in this set (11)
What is a "cash flow table?"
A clash flow table shows the "money consequences of a situation and its timing.
What is simple interest?
Simple interest is interest that is computed on the original sum.
What is compound interest?
Compound interest charges interest on the principal owed plus the interest earned to date.
What is nominal interest?
Nominal interest is the annual interest rate without considering the effect of any compounding.
What is effective interest?
Effective interest is the annual interest rate taking into account the effect of any compounding during the year.`
Engineering economics problems fall into 3 categories. What are they?
Fixed input - the amount of money or other input resources is fixed. Fixed output - there is a fixed task or other input to be accomplished. Neither input not output is fixed - neither the amount of money nor the amount of benefits is fixed.
What is capitalized cost?
Capitalized cost is the analysis of the present worth of cost (where the analysis period is infinite).
What is future worth analysis?
Future worth analysis is an analysis based on some future point in time.
What is the benefit-cost ratio?
The benefit-cost ratio is the ratio of benefits divided by costs.
B/C = Equivalent uniform annual benefits / Equivalent uniform annual cost
What is depreciation?
Depreciation is the systematic allocation of the cost of a capital asset over its useful life.
What is book value?
Book value is the original cost of an asset, minus the accumulated depreciation of the asset.
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