Computational Economic Analysis for

Recent global anxiety indicates that more focus needs to be directed at economic issues related to industry. Conventional techniques often do not adequately embrace the integrated global factors that affect unique industries and industry focused computational tools have not been readily available. Until now. Computational Economic Analysis for Engineering and Industry presents direct computational tools, techniques, models, and approaches for economic analysis with a specific focus on industrial and engineering processes.Here are just a few of the topics you'll find:· New economic analysis models and techniques· Tent-shaped cash flows· Industrial economic analysis· Project-based economic measures· Profit ratio analysis· Equity break-even point· Utility based analysis· Project-balance analysis· Customized ENGINEA software tool· Engineering conversion factorsThe authors supply downloadable software, ENGINEA, that allows you to easily perform the various techniques outlined in the text, such as investment justification, breakeven analysis, and replacement analysis. Providing a high-level presentation of economic analysis of the unique aspects of industrial processes, they integrate mathematical models, optimization, computer analysis, and managerial decision processes. A comprehensive treatment of economic analysis considering the specific needs of industry, the book is a pragmatic alternative to conventional economic analysis books.

Preface	p. xv
The Authors	p. xvii
Applied economic analysis	p. 1
Cost- and value-related definitions	p. 1
Economics of worker assignment	p. 4
Economics of resource utilization	p. 6
Minimum annual revenue requirement (MARR) analysis	p. 7
Flow-through method of MARR	p. 10
Normalizing method of MARR	p. 11
Cost concepts and techniques	p. 17
Project cost estimation	p. 19
Optimistic and pessimistic cost estimates	p. 20
Cost monitoring	p. 21
Project balance technique	p. 21
Cost and schedule control systems criteria	p. 22
Sources of capital	p. 24
Commercial loans	p. 25
Bonds and stocks	p. 25
Interpersonal loans	p. 25
Foreign investment	p. 25
Investment banks	p. 26
Mutual funds	p. 26
Supporting resources	p. 26
Activity-based costing	p. 26
Cost, time, and productivity formulas	p. 27
Practice problems for cost concepts and techniques	p. 32
Fundamentals of economic analysis	p. 33
The economic analysis process	p. 33
Simple and compound interest rates	p. 34
Investment life for multiple returns	p. 36
Nominal and effective interest rates	p. 36
Cash-flow patterns and equivalence	p. 39
Compound amount factor	p. 41
Present worth factor	p. 41
Uniform series present worth factor	p. 42
Uniform series capital recovery factor	p. 43
Uniform series compound amount factor	p. 43
Uniform series sinking fund factor	p. 44
Capitalized cost formula	p. 45
Permanent investments formula	p. 46
Arithmetic gradient series	p. 47
Increasing geometric series cash flow	p. 49
Decreasing geometric series cash flow	p. 50
Internal rate of return	p. 52
Benefit/cost ratio	p. 52
Simple payback period	p. 54
Discounted payback period	p. 55
Fixed and variable interest rates	p. 57
Practice problems for fundamentals of economic analysis	p. 58
Economic methods for comparing investment alternatives	p. 61
Net present value analysis	p. 61
Annual value analysis	p. 66
Internal rate of return analysis	p. 70
External rate of return analysis	p. 74
Incremental analysis	p. 75
Guidelines for comparison of alternatives	p. 76
Practice problems: Comparing investment alternatives	p. 81
Asset replacement and retention analysis	p. 85
Considerations for replacement analysis	p. 85
Terms of replacement analysis	p. 86
Economic service life (ESL)	p. 87
Replacement analysis computation	p. 88
Practice problems for replacement and retention analysis	p. 97
Depreciation methods	p. 99
Terminology of depreciation	p. 99
Depreciation methods	p. 100
Straight-line (SL) method	p. 101
Declining balance (DB) method	p. 102
Sums-of-years' digits (SYD) method	p. 105
Modified accelerated cost recovery system (MACRS) method	p. 106
Practice problems: Depreciation methods	p. 109
Break-even analysis	p. 113
Illustrative examples	p. 113
Profit ratio analysis	p. 117
Practice problems: Break-even analysis	p. 120
Effects of inflation and taxes	p. 123
Mild inflation	p. 126
Moderate inflation	p. 126
Severe inflation	p. 127
Hyperinflation	p. 127
Foreign-exchange rates	p. 129
After-tax economic analysis	p. 130
Before-tax and after-tax cash flow	p. 132
Effects of taxes on capital gain	p. 132
After-tax computations	p. 132
Practice problems: Effects of inflation and taxes	p. 133
Advanced cash-flow analysis techniques	p. 135
Amortization of capitals	p. 135
Equity break-even point	p. 139
Introduction to tent cash-flow analysis	p. 142
Special application of AGS	p. 142
Design and analysis of tent cash-flow profiles	p. 143
Derivation of general tent equation	p. 148
Multiattribute investment analysis and selection	p. 151
The problem of investment selection	p. 151
Utility models	p. 151
Additive utility model	p. 154
Multiplicative utility model	p. 155
Fitting a utility function	p. 155
Investment value model	p. 161
Capability	p. 162
Suitability	p. 162
Performance	p. 162
Productivity	p. 163
Polar plots	p. 163
The analytic hierarchy process	p. 170
Investment benchmarking	p. 175
References	p. 177
Budgeting and capital allocation	p. 179
Top-down budgeting	p. 179
Bottom-up budgeting	p. 179
Mathematical formulation of capital allocation	p. 180
The ENGINEA software: a tool for economic evaluation	p. 189
The ENGINEA software	p. 189
Instructional design	p. 190
Cash-flow analysis	p. 190
Replacement analysis	p. 191
Depreciation analysis	p. 193
Interest calculator	p. 194
Benefit/cost (B/C) ratio analysis	p. 195
Loan/mortgage analysis	p. 196
Rate-of-return (ROR) analysis	p. 197
The Excel spreadsheet functions	p. 199
DB (declining balance)	p. 199
DDB (double declining balance)	p. 199
FV (future value)	p. 199
IPMT (interest payment)	p. 200
IRR (internal rate of return)	p. 200
MIRR (modified internal rate of return)	p. 200
NPER (number of periods)	p. 200
NPV (net present value)	p. 201
PMT (payments)	p. 201
PPMT (principal payment)	p. 201
PV (present value)	p. 202
Rate (interest rate)	p. 202
SLN (straight-line depreciation)	p. 202
SYD (sum-of-year digits depreciation)	p. 203
VDB (variable declining balance)	p. 203
Reference	p. 203
Cost benchmarking case study	p. 205
Abstract	p. 205
Introduction	p. 205
Basis of the methodology	p. 207
Data gathering and analysis	p. 208
New project financing options	p. 208
Analysis of funding options	p. 209
Cost comparison basis	p. 209
Analysis of the cost drivers	p. 210
Evaluation baselines	p. 211
Data collection processes	p. 213
Analysis of the factors	p. 214
F1: Impact of Davis Bacon Wages	p. 214
Data findings	p. 214
F2: Impact of PLA	p. 214
Datafindings	p. 214
F3: Additional ESH&Q requirements	p. 215
Data findings	p. 215
F4: Impact of excessive contract terms and conditions	p. 216
F5: Impact of procurement process	p. 216
Conclusions and recommendations	p. 218
Recommendations for reducing future project costs	p. 219
Overall project recommendation	p. 220
Reference	p. 220
Definitions and terms	p. 221
Engineering conversion factors	p. 237
Computational and mathematical formulae	p. 245
Units of measure	p. 251
Interest factors and tables	p. 253
Index	p. 283
Table of Contents provided by Ingram. All Rights Reserved.

What is included with this book?

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.

FREE SHIPPING

Rent More, Save More! Use code: BBRENTAL

5% off 1 book, 7% off 2 books, 10% off 3+ books

Computational Economic Analysis for Engineering and Industry

Summary

Table of Contents

Supplemental Materials