Making Choices: the Method, MARR, and Multiple Attributes
Making Choices: the Method, MARR, and Multiple Attributes
This chapter broadens the capabilities of an engineering economy study.
Some of the fundamental elements specified previously are unspecified here.
As a result, many of the textbook aspects apparent in previous chapters are
removed, thus coming closer to treating the more complex, real-world situations
in which professional practice and decision making occur.
In all the previous chapters, the method for evaluating a project or comparing
alternatives has been stated, or was obvious from the context of the
problem. Also, when any method was used, the MARR was stated. Finally,
only one dimension or attribute—the economic one—has been the judgment
basis for the economic viability of one project, or the selection basis
from two or more alternatives. In this chapter, the determination of all three
of these parameters—evaluation method, MARR, and attributes—is discussed.
Guidelines and techniques to determine each are developed and
illustrated.
The case study examines the best balance between debt and equity capital,
using a MARR-based analysis.
