The science which studies human behavior as a relationship between ends and scarce means which have alternative uses.

Comes in whenever more of one thing means less of another.

The study of the use of scarce resources to satisfy unlimited human wants.

The dollars and cents side of the decisions that engineers make or recommend as they work to position a firm to be profitable in a highly competitive marketplace.

The analysis and evaluation of the factors that will affect the economic success of engineering projects to the end that a recommendation can be made which will ensure the best we of capital.

Are those products or services that are required to support human life and activities, that will be purchased in somewhat the same quantity even though the price varies considerably.

Are those products or services that are desired by humans and will be purchased if money is available after the required necessities have been obtained.

The quantity of a certain commodity that is bought at a certain price at a given place and time.

The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.

All gifts of nature, such as: water, air, minerals, sunshine, plant and tree growth, as well as the land itself which is applied to the production process.

The efforts, skills and knowledge of people which are applied to the production process.

Tools, buildings, machinery or things which have been produced which are used in further production.

Assets and money which are used in the production process.

Education and training applied to labor in the production proccess.

A person or individual who wants to supply the product to the market, in order to make profit.

Usually invest their own capital in their business.

Carefully define the problem. Then the choice (decision) is among alternative. The alternatives need to be identified and then defined for subsequent analysis.

Only the differences in expected future outcomes among the alternatives are relevant to their comparison and should be considered in the decision.

The prospective outcomes of the alternatives, economic and other, should be consistently developed from a defined viewpoint (perspective).

Used to enumerate as many of the prospective outcomes as possible will simplify the analysis of the alternatives.

Selection of preferred alternative (decision maning) requires the use of a criterion (or several criteria.

Are inherent in estimating the future outcomes of the alternatives and should be recognized in their analysis and comparison

Improved decision-making results from an adaptive process; to the extent practicable, the initial projected outcomes of the selected alternative should be subsequently compared with actual results achieved.

Is the amount of money paid for the use of borrowed capital or the income produced by money which has been loaned.

Is calculated using the principal only, ignoring any interest that had been accrued in preceding periods.

Is paid on short-term loans in which the time of the loan is measured in days.

Is computed on the basis of 12 months of 30 days each or 360 days a year.

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

Interest on top of interest.

The cost of borrowing money.

The amount earned by a unit principal per unit time.

Specifies the rate of interest and a number of interest periods in one year.

The actual or exact rate of interest on the principal during one year.

Interest earned in one year/ principal at the beginning of the year.

Obtained by setting the sum of the values on a certain comparison or focal date of one set of obligations equal to the sum of the values on the same date of another set of obligations.

The interest is compounded at the end of each finite-length period, such as a month, a quarter or a year.

Is assumed that cash payments occur once per year, but the compounding is continuous throughout the year.

__ on a negotiable paper is the difference between the present worth (the amount received for the paper in cash) and the worth of the paper at some time in the future (the face value of the paper or principal).

Interest paid in advance.

The discount on one unit of principal for one unit of time.

The increase in the prices for goods and services from one year to another, thus decreasing the purchasing power of money.

The buying power of money decreases as costs increase.

Is a series o equal payments occuring at equal periods of time.

One where the payments are made at the end of each period.

(A/P, i%, n)

(A/F, i%, n)

One where the first payment is made several periods after the beginning of the annuity.

One where the payments are made at the beginning of each period.

One where the payments continue indefinitely.

One of the most important applications of perpetuity.

The sum of the first cost and the present worth of all costs of replacement, operation and maintenance for a long time or forever.