Everything_you_wanted_to_know_about_engineering_economy_new

Everything_you_wanted_to_know_about_engineering_economy_new...

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ENGINEERING ECONOMY  FOR CIVIL AND ENVIRONMENTAL ENGINEERS CEE 3000 CIVIL ENGINEERING SYSTEMS COURSE NOTES: MODULE 3 Michael D. Meyer, Ph.D., P.E. Adjo Amekudzi, Ph.D. Fall 2007 1
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1.0  INTRODUCTION      We now come to that point in the class that is near and dear to engineers (and to their  clients)---money!!   In this module, we will examine several different engineering economy  concepts that are fundamental to successful engineering practice.  These include: Time value of money Different distributions of benefits and costs over time Methods   of   assessing   the   relative   worth   of   different   projects   or   project  alternatives       Throughout your life, you will face decisions that relate to concepts presented in this  module.  For example, if you borrow money to buy a car or a house, or seek a loan to pay for  a college education, you will be faced with that unfortunate concept called “interest”.  Or  even more pervasive, you will likely be bombarded by numerous offers for credit cards, each  offering wonderful terms on repaying the dollars that have been spent in purchases.  And  likewise, if you think about putting aside funds for your children’s education or other  personal investments, you will experience the fortunate concept of interest and interest  compounding .    Thus, becoming familiar with the materials in this module will not only  benefit you professionally, but could also help you with personal financial success. 2.0 WHY STUDY ENGINEERING ECONOMY?      In a fantasy world of unlimited funding for infrastructure investment and little concern for  impacts on the environment and on the community, decisions on which infrastructure project  to build are simple---build them all.  We do not live in such a world.  As was shown earlier in  this course, as a society and as a profession, we  are   concerned about sustainability and  community/environmental impacts.  And as a society, we do not have unlimited funding for  infrastructure.   Decisions must be made on which projects will provide the greatest good to  society or the greatest return on investment to a private company.  In other words, choices   must be made.   In order to do so, tradeoffs must be identified and assessed.  Engineering  economic  analysis provides the engineer  with powerful tools to assist in making such  choices.       Engineering economy is the analysis of the value of money that is expended or received   at  different points in time, with particular focus for civil engineers on how individual project  alternatives compare to one another.  In other words, given a number of projects or project 
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This note was uploaded on 06/07/2009 for the course CEE 3000 taught by Professor Meyer during the Fall '07 term at Georgia Institute of Technology.

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Everything_you_wanted_to_know_about_engineering_economy_new...

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