The authors cover two general topics: basic engineering economics and risk analysis in this text. Within the topic of engineering economics are discussions on the time value of money and interest relationships. These interest relationships are used to define certain project criteria that are used by engineers and project managers to select the best economic choice among several alternatives. Projects examined will include both income- and service-producing investments. The effects of escalation, inflation, and taxes on the economic analysis of alternatives are discussed. Risk analysis incorporates the concepts of probability and statistics in the evaluation of alternatives. This allows management to determine the probability of success or failure of the project. Two types of sensitivity analyses are presented. The first is referred to as the range approach while the second uses probabilistic concepts to determine a measure of the risk involved. The authors have designed the text to assist individuals to prepare to successfully complete the economics portions of the Fundamentals of Engineering Exam.
Table of Contents
Interest and the Time Value of Money
Project Evaluation Methods
Service Producing Investments
Income Producing Investments
Determination of Project Cash Flow
Basic Statistics and Probability
About the Author(s)David Whitman
, University of Wyoming
David L. Whitman, P.E., Ph.D. received a B.S. degree (1975) in Electrical Engineering from the University of Wyoming (UW). He also received a Ph.D. degree (1978) in Mineral Engineering from the University of Wyoming. He worked in the synthetic fuels arena prior to becoming a faculty member in Petroleum Engineering at the University of Wyoming in 1981. From 1989 to 2005, he was the Associate Dean of Academics and since 2005 has been a professor of Electrical and Computer Engineering. He received UW's Ellbogen Outstanding Teacher Award in 1985, UW's College of Engineering Outstanding Undergraduate Teaching Award in 1990 and 2004 and the ASEE Rocky Mountain Section Outstanding Teaching Award in 2001. He is a Past President of the National Council of Examiners for Engineers and Surveyors (NCEES), chairman of the IEEE-USA Licensure & Registration Committee, and an active member of ASEE.Ronald Terry
, Brigham Young University
Ronald E. Terry, Ph.D. received a B.S. in Chemical Engineering from Oregon State University (1971) and a Ph.D. from Brigham Young University (BYU) (1976). He worked for Phillips Petroleum Company after graduate school and began his academic career in 1977 at the University of Kansas in the Chemical and Petroleum Engineering Department. He taught in the Petroleum Engineering Department at the University of Wyoming (1981-1987) and at BYU in the Chemical Engineering Department (1987-2007) and in the Technology and Engineering Education Department (2007-present). He has received teaching awards at the University of Kansas, University of Wyoming, and at Brigham Young University. Early in his career, his scholarship efforts involved researching methods to enhance the production of oil and gas. After joining BYU, his scholarship centered on pedagogy, student learning, and engineering ethics. He has served as acting department chair, associate dean, and in BYU's central administration as an Associate in the Office of Planning and Assessment for five years (2003-2008). He is past president of the Rocky Mountain Section of the American Society for Engineering Education.