Understanding Engineering Economy: A Practical Approach
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Understanding Engineering Economy: A Practical Approach provides a comprehensive overview of economic and financial decision-making methods for a diverse range of engineering disciplines. Now delivered in an interactive and immersive online format, the title addresses real-world issues, such as personal retirement planning, mortgage refinancing, property pricing for optimal return on investment, and economic analysis for decision-making. Emphasizing the importance of the time value of money, the edition includes additional materials, such as practical examples, review exercises, and quiz questions.
The NEW Fourth Edition of Understanding Engineering Economy: A Practical Approach:
contains essential formulas and solutions, along with a practical interest table.
provides a convenient resource for students to study and review materials, featuring exercises, quizzes, flashcards, and sample exam questions.
recognizes the challenges faced by engineering students unfamiliar with financial concepts by simplifying complex elements and facilitate understanding. The author focuses on simplicity, accuracy, clarity, and practical problem-solving, addressing common misconceptions and difficulties through years of teaching experience.
is organized into six lessons, the book covers key aspects of engineering economy, from basic concepts and interest formulas to advanced topics like economic analysis of alternatives, depreciation methods, breakeven analysis, and sensitivity analysis. Each lesson concludes with a summary, review exercises, and quiz questions for skill development.
is delivered via an immersive and interactive online format that allows for content to be updated in real-time that integrates new research and information. In addition, it integrates animations and interactive graphics to enhance the learning process.
Tailored for a one-semester engineering economy course, the book provides suggested lecture guidelines for a sixteen-week semester. Additionally, it proves valuable for engineering professionals preparing for exams like the "Fundamentals of Engineering" (FE) and the Professional Engineering (PE) exams, offering typical exam questions with solutions and serving as a reference throughout one's career.
Lesson 1 Overview of Terminology Definitions and Concepts
Decision-Making Cycle and Process
Cash Flow Diagram and the Concept of Net Cash Flow
Concept of Interest and the Time Value of Money
Lesson 1: Quiz Questions
Lesson 2 Interest Formulas and Their Applications
Overview of Interest Formulas and Their Applications
Symbols Used in Engineering Economy
Derivation of the Interest Formula
Compounding Interest Calculations
Nominal and Effective Interest
Simple Interest Versus Compound Interest
Uniform Series Compound Interest Formula
Arithmetic Gradient Uniform Series
A Short-Cut Procedure to Find an Unknown Value
Applied Short-Cut Procedure to Find an Unknown Value
Lesson 2: Quiz Questions
Lesson 3 Economic Analysis of Alternatives
Overview of Economic Analysis of Alternatives
Present Worth (PW) Analysis
Annual Cash Flow Analysis
Lesson 3: Quiz Questions
Lesson 4 More Economic Analysis of Alternatives
Rate of Return Analysis—Single Project
Rate of Return Analysis—Multiple Projects
Calculations in Practice
Summary of Rate of Return Problem-Solving Procedure
Benefit Cost Ratio Analysis
Summary of Benefit Cost Ratio Problem-Solving Procedure
More Practical Examples of ROR and B/C Ratio Analysis
Lesson 4: Quiz Questions
Lesson 5 Depreciation Calculation and Income Tax for Business Firms
Basic Concept of Depreciation
Typical Depreciation Methods and Applications
Straight Line (SL) Depreciation
Sum of Year Digits (SOYD) Depreciation
Declining Balance (DB) Depreciation
Income Taxes for Business
Before Tax and After Tax Economic Analysis of Alternatives
Lesson 5: Quiz Questions
Lesson 6 Breakeven Analysis and Sensitivity Analysis
Overview of Breakeven Analysis and Sensitivity Analysis
Typical Applications of Breakeven Analysis/Sensitivity Analysis
Application 1: Produce and Sell for Profit (Profit Analysis)
Application 2: Choice between Two Production Lines (Cost Analysis)
Application 3: Choice of Buying versus Producing (Cost Analysis)
Examples of Breakeven Analysis/Sensitivity Analysis in Practices
Lesson 6: Quiz Questions
Appendix A Formula Reference Page
Appendix B Solutions to Review Exercises
Appendix C Practice Problems for FE and PE Exams with Full Solutions
Dr. Khokiat Kengskool is currently the Director of International Programs for Southeast Asia, College of Engineering and Computing (CEC) at Florida International University (FIU) and a faculty member of the Department of Civil and Environmental Engineering. Dr. Kengskool has helped recruit a significant number of highly-qualified Ph.D. students from leading universities in Thailand for the College of Engineering and Computing.
Dr. Kengskool’s mission is to recruit, admit and retain a highly qualified diverse international student body, especially for the Ph.D. programs, to develop and promote the option of Dual Enrollment for graduate and undergraduate students and also to establish, promote and provide cost-effective transformational exchange and study abroad programs in the region. His areas of research interest include Applied Artificial Intelligence, Decision-Making Support Systems and Productivity Enhancement. He has over 70 refereed publications and approximately 50 national and international presentations in the areas of Productivity Enhancement and Applied Artificial Intelligence. As a Professor of Engineering Economy, he is the sole author of a published textbook for engineering students titled Understanding Engineering Economy, A Practical Approach (2016, 2017). He has published two additional custom textbooks for his classes including Engineering Economic Analysisand Engineering Design Graphics.
Dr. Kengskool has received several funded grants from major U.S. corporations and U.S. Government agencies such as the National Science Foundation (NSF) for his research. He has earned numerous honors and awards in his career, including an honorable “Teaching Award” from FIU and most recently the “30-Years of Recognition & Service Award” from FIU (Spring 2017). Dr. Kengskool earned his Master’s and Ph.D. degrees in Industrial Engineering from the University of Missouri-Columbia in 1983 and 1986, respectively. He also earned a Master’s degree in Engineering Management from Missouri University of Science and Technology (Rolla-Missouri) in 1976. He received a Bachelor of Engineering degree in Industrial Engineering from Chulalongkorn University, Bangkok, Thailand in 1974.