The need for engineering economy is primarily motivated by the work that
engineers do in performing analysis, synthesizing, and coming to a conclusion
as they work on projects of all sizes. In other words, engineering economy
is at the heart of making decisions. These decisions involve the fundamental
elements of cash flows of money, time, and interest rates. This
chapter introduces the basic concepts and terminology necessary for an engineer
to combine these three essential elements in organized, mathematically
correct ways to solve problems that will lead to better decisions. Many
of the terms common to economic decision making are introduced here and
used in later chapters of the text. Icons in the margins serve as back and forward
cross-references to more fundamental and additional material throughout
the book.
The case studies included after the end-of-chapter problems focus on the
development of engineering economy alternatives.
