Donald G. Newnan, John Whittaker, Ted G. Eschenbach and Jerome P. Lavelle
Praised by instructors and students alike for its lucidity, breadth of coverage, and extensive problem sets, the best-selling Engineering Economic Analysis has been revised for a new second Canadian edition! this trusted text exposes students to the universal principles of engineering economy
while also offering them specific Canadian examples - such as Canadian tax law and Canadian accounting references - that make it a valuable resource for students in this country. Updated and revised with new material on ethics, sustainability, and environmental stewardship, as well as new case
studies and problems, this new edition is the most current resource available. With comprehensive coverage of the fundamental concepts of engineering economy, such as decision-making, cost estimating, cash flow, interest, inflation, rate of return, depreciation, taxes, and more, Engineering Economic
Analysis, Second Canadian Edition is the essential text for all students takiing introductory engineering economics courses.
From the Publisher
Preface and Acknowledgments
Contents
1. Making Economic Decisions
A Sea of Problems
The Role of Engineering Economic Analysis
The Decision-Making Process
2. Engineering Costs and Cost Estimating
Engineering Costs
Cost Estimating
Estimating Models
Estimating Benefits
Cash Flow Diagrams
3. Interest and Equivalence
Computing Cash Flows
Time Value of Money
Equivalence
Single Payment Compound Interest Formulas
4. More Interest Formulas
Uniform Series Compound Interest Formulas
Relationships Between Compound Interest Factors
Arithmetic Gradient
Geometric Gradient
Nominal and Effective Interest
Continuous Compounding
Spreadsheets for Economic Analysis
5. Present Worth Analysis
Assumptions in Solving Economic Analysis Problems
Economic Criteria
Applying Present Worth Techniques
Spreadsheets and Present Worth
Annual Cash flow Calculations
6. Annual Cash Flow Analysis
Analysis Period
Using Spreadsheets to Analyse Loans
7. Rate of Return Analysis
Internal Rate of Return
Calculating Rate of Return
Rate of Return Analysis
Spreadsheets and Rate of Return Analysis
8. Incremental Analysis
Graphical Solutions
Incremental Rate of Return Analysis
Elements in Incremental Rate of Return Analysis
Present Worth Analysis with Benefit-Cost
Graphs
Choosing an Analysis Method
Spreadsheets and Incremental Analysis
9. Other Analysis Techniques
Future Worth Analysis
Benefit-Cost Ratio Analysis
Payback Period
Sensitivity and Breakeven Analysis
Graphing with Spreadsheets for Sensitivity and Breakeven
Analysis
10. Uncertainty in Future Events
Estimates and Their Use in Economic Analysis
A Range of Estimates
Probability
Joint Probability Distributions
Expected Value
Economic Decision Trees
Risk
Risk Versus Return
Simulation
11. Income,
Depreciation, and Cash Flow
Basic Aspects of Depreciation
Historical Depreciation Methods
Modified Accelerated Cost Recovery System (MACRS)
Depreciation and Asset Disposal
Unit-of-Production Depreciation
Depletion
Spreadsheets and Depreciation
12. After-Tax
Cash Flows
A Partner in Business
Calculation of Taxable Income
Income Tax Rates
Economic Analysis Taking Income Taxes into Account
Capital Gains and Losses for Nondepreciated Assets
Estimating the After-Tax Rate of Return
After-Tax Cash Flows and Spreadsheets
13. Replacement Analysis
The Replacement Problem
Replacement Analysis Decision Maps
What is the Basic Comparison?
After-Tax Replacement Analysis
Spreadsheets and Replacement Analysis
14. Inflation and Price Change
Meaning and Effect of Inflation
Analysis in
Constant Dollars versus Then-Current Dollars
Price Change with Indexes
Cash Flows That Inflate at Different Rates
Different Inflation Rates per Period
Inflation Effect on After-Tax Calculations
Using Spreadsheets for Inflation Calculations
15. Selection of a Minimum
Attractive Rate of Return
Sources of Capital
Cost of Funds
Investment Opportunities
Selecting a Minimum Attractive Rate of Return
Adjusting MARR to Account for Risk and Uncertainty
Representative Values of MARR Used in Industry
16. Economic Analysis in the Public
Sector
Investment Objective
Viewpoint for Analysis
Selecting an Interest Rate
The Benefit-Cost Ratio
Incremental Benefit-Cost Analysis
Other Effects of Public Projects
17. Rationing Capital among Competing Projects
Capital Expenditure Project Proposals
Rationing Capital by Rate of Return
Rationing Capital by Present Worth Methods
Appendix A: Introduction to Spreadsheets
The Elements of a Spreadsheet
Defining Variables in a Data Block
Copy Command
Appendix B: Compound Interest Table
References
Index
Student Resources:
Student Study CD (packaged with text)
Online Solutions Key
Instructor Resources:
Instructor's Manual
PowerPoint Slides
Test Generator
Donald G. Newnan is a professor emeritus at San Jose State University. John Whittaker is a professor emeritus in the Department of Mechanical Engineering at the University of Alberta. He instructs and researches in the areas of engineering economics, project management, and management of
engineers. From 1963 to 1970, he worked as a structural engineer for a variety of firms in America, Canada, and England. In addition to his work at the university, he has worked as a consultant in the areas of engineering economy, risk analysis, industrial productivity, high-tech entrepreneurship,
and cross-cultural training. Ted G. Eschenbach is a professor emeritus at the University of Alaska Anchorage. Jerome P. Lavelle is assistant dean in the College of Engineering at North Carolina State University.
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