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100問 • 1年前

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It involves the systematic evaluation of economic marriage of proposed solution engineering problems

Engineering economy

Previously known as engineering economy

Engineering economics

It involves formulating, estimating and evaluating the economic outcomes and alternative to accomplish a defined purpose or available

Engineering economics

why engineering economics is important to engineers

Understanding and applying time value of money, economic equivalence, and cost estimation are vital for engineers

What are the general steps for decision-making processes?

Understand the Problem, Collect relevant information, Define the set of feasible alternatives, Identify the criteria for decision-making, Evaluate alternatives and apply sensitivity analysis, Select the best alternative, Implement alternative and monitor results

A fundamental financial principle that states a peso today is worth more than the same peso in the future due to its potential earning capacity

Time value of money

It is the manifestation of time value of money

Interest

Interest paid over a time period Express as a percentage of principle.

Interest rate

It is a fee that one pay to use someone else, money or the difference between an ending amount of money and a beginning amount of money

Interest

Interest is calculated using principle only

Simple interest

Is computed on the basis of one bankers year equivalent to 360 days or 12 months each month consisting of 30 days

Ordinary, simple interest

Is based on the exact number of days 365 for an ordinary and 366 for leap year

exact simple interest

Interest is based on principal plus all accurate interest interest that is interest compounds overtime

Compound interest

These are revenues, receipts, incomes, saving generated by projects, and activities that flows in plus sign used

Cash inflows

These are disbursements costs, expenses, taxes cost by projects and activities that flow out minus sign used

Cash outflows

Funds flow at the end of a given interest.

End of period assumption

It is the increase in amount of money needed to purchase, same amount of goods or services.

Inflation

Results in a decrease in purchasing power

Inflation

Opposite of inflation, purchasing power of money is greater in feature than a present, however, money credit jobs are tighter

Deflation

What are the three different rates?

Real or inflation rate, Market or inflation – adjusted rate, Inflation rate

It is the rate at which interest is earned. When effects of inflation are removed. It represents the real increase in purchasing power.

Real or inflation rate

Rate that takes inflation into account company stated rate every day

Market or inflation

Rate of change in value of currency, it is the relation between three rates

Inflation rate

What is the relationship between inflation rate, and the value of your peso?

The higher inflation rate, the less the value of your peso overtime

Prices rise at an increasing rate

Escalating, inflation

Prices rice at the decreasing rate

Disinflation

Prices decline

Deflation

Inflation rates are computed using what

CPI are also known as consumer price index

What agency in the Philippines that collects monthly price data

Philippines, statistics, authority, or PSA

These are the prices collected that used to form one price index

Consumer price index or CPI

Is weighted by commodities relative importance in the average consumers budget

CPI

What are the three legitimate reasons why interest rates exist?

Risk, Opportunity cost, Inflation

It is where the borrower may not repay or not repay on time. It is where your circumstances change and money may worth less to you one year later than now, or the mortality risk.

Risk

You could use the money on something that derives pleasure

Opportunity cost

Money repaid to you in the future is not worth as much as money loan today in purchasing power

Inflation

What are the reason that different people will want to charge different rates?

The risk is different, Your opportunity cost may be different, Your estimation of future inflation rate can be different

The factor 1+ I was to the power of N is called what

Single payment compound amount, factor

The expression one plus I raised to the power of negative N is known as blank

Single payment present worth factor

It is formulated to make or purchase a product to develop a process, or to provide a service with specified result

Engineering project or alternative

It evaluates cash flow estimates for parameters, such as initial cost and will cost and revenues non-recurring cost impossible salvage value over an estimated useful life of the product process or service

Engineering economic analysis

This are cost that do not bury it remain constant and unchanging, regardless of the level of the activity

Fixed cost

Costs that vary in total with a quantity of output, or other measures of activity level

Variable costs

Cost that can be reasonably measured and allocated the specific output or work activity

Direct costs

Cost that is difficult to attribute or allocate to a specific output or work activity

Indirect/overhead cost

It is a money already spent due to a past decision

Sunk cost

As engineering economist what we deal

Present and future opportunities

What cost is to build disregard in engineering economic analysis

Sunk cost

This is a benefit that is forgotten by engaging a business resource in a chosen activity, instead of engaging that same resource in the forgone activity

Opportunity cost

This are those expenses that are known anticipated, and occur at regular intervals

Recurring costs

Cost can be modeled as cash flows

Recurring cost

One of a kind or one time event that occurs at the regular intervals

Non-recurring cost

They are difficult to plan for anticipate

Non-recurring cost

Give an example of recurring expenses

Rent or mortgage, Salaries and wage, Utilities, Marketing and advertising, Software subscription, Insurance premiums

Example of non-recurring expenses

Office equipment, Website development, Marketing campaign, Major repairs, or renovations, Research and development, Professional fees

Is the additional cost that results from selecting one alternative over another?

Incremental cost

The difference in cost between two alternative investments or activities

Incremental cost

It is based on the concept of equivalent worth of all cash flows relative to some base or beginning point in time

Present

And this method all cash influence and outflows are compounded forward the reference point in time called future

Future worth method

At the same method in which it is based on the concept of equivalent worth of all cash flows relative to some base or beginning point in time called present

Present worth method

It is the equal annual series of peso amounts for a stated, study period equivalent to the cash inflows and outlaw. MARR.

Annual worth method

It is the annual equivalent revenues or savings or minus the annual equivalent expenses E less it’s annual equivalent and cap. Recovery cost CR

Annual worth method

The equivalent uniform annual cost of the capital invested in its computed with I equals to MARI, using one of the formulas

Capital recovery cost

A project is acceptable if the annual worth is greater than

Zero

It is also known as investors, method, discounted, cash flow, method, and profitability index

Internal rate of return method or IRR

It is the interest rate that makes the equivalent worth of cash inflows to equal the equivalent worth of cash outflows

Internal rate of return method

The IRR method may be use only if the following conditions are satisfied The first nonzero cash flow is called blank

Disbursement

There is blank change in sign in the sequence for example and initial disbursement or as of disbursement, followed by a series of receipt

Only one

The sum of all receipts exceeds blank

The sum of all cash outflows

It is a decision-making tool used to systematically develop useful information about the desirable and desirable effect, usually usually a public projects

Benefits/cost ratio method

Benefits/cost ratio method is also known as blank

Savings – investment ratio, or SIR

A project is acceptable when either the conventional or modified B/C ratio is greater than equal to blank

1.0

It is the blank of a project is the present word or value of a project that is assumed the last forever

Capitalized, equivalent, amount, or CEA

CEE, or the capitalized equivalent amount is also known as

Capital word method

It is a convenient basis for comparing mutually exclusive alternatives, when the period of lead service in indefinitely, long and repeatability assumption is applicable

Capitalized, equivalent amount

Alternatives are said to be mutually exclusive, if acceptance of one alternative from precludes the acceptance of any others

Comparing alternatives

It must be performed to determine which one to choose among mutual exclusive alternatives, and how much capital to invest because different levels of investment produce economic outcomes

Engineering economy study

Those with initial or capital investments, expected to produce positive cash flows from increase revenue savings through reduced cost or both

Investment alternatives

It is the alternative that requires the least investment of capital and the past return equal two or greater than the MARR

Base alternative

These are alternatives, those with all negative cash flow elements, except for a possible positive, positive, cash flow element from disposal of assets, such as salvage value at the end of the project life

Cost alternatives

They can be used to select the mutual exclusive alternative that is most desirable

Present worth annual worth and future worth method

This comparisons, based on total investment, using equivalent worth methods, represent the most straightforward techniques for comparing mutual exclusive alternatives

Comparisons based in total investment

For this alternative, the one that gives the greatest equivalent words should be selected

Investment alternatives

It is the one with the least equivalent cost should be selected

Cost alternative

It is the difference between the cash flows, or mutually exclusive alternatives that is relevant for determining the economic desirability of one compared to the other

Incremental investment analysis

It is the assuming that economic consequences during the alternatives. Initial lifespan will be the same in all the succeeding lifespans.

Repeatability assumptions

It uses the selected study period for all alternatives with appropriate assumptions, and adjustments to put alternatives on a common and comparable basis

Co- terminated assumption

It has meaning that vary in usage usually refers to the expenditure in some particular situation

Cost or expense

Integrated with principles of engineering economy, the ultimate objective of engineering application is the satisfaction of human needs and wants

Cost concepts

It will differ in the cost, they involve relative to the objective of one satisfaction

Alternative engineering proposals

Also known as initial cost or investment cost

First cost

Cost of getting an activity started

Initial our first cost

It ordinarily occurs only once for any given activity

First cost

Our cost experience continually over the usual life of an investment project or venture

Operation and maintenance cost

It contains most of the recurring coast element associated with operation fees of the life cycle of a project

Operation and maintenance cost

Those that are unaffected by changes in activity level over a visible range of operation for the capacity or capability available

Fixed cost

These are those associated with an operation that vary in relation to changes in quantity of output, or other measures of activity level

Variable cost

Those that can be reasonably measured and allocated a specific output or work activity

Direct cost

Is the cost of material or component that actually becomes a physical part of finished product

Direct cost

Represents that we just paid to those work directly on the product

Direct cost

100

Referred to us in direct cost or burden cost that consist of plant operating cost that are neither direct labor or direct material cost

Overhead costs

Materials

ユーザ名非公開 · 100問 · 2年前

Materials