| Annual amount or worth | A or AW - Equivalent uniform annual worth of all cash inflows and outflows over estimated life (1.7, 6.1).
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| Annual operating cost | AOC - Estimated annual costs to maintain and support an
alternative (1.3).
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| Benefit/cost ratio | B/C - Ratio of a project’s benefits to costs expressed in PW,
AW, or FW terms (9.2).
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| Breakeven point | QBE - Quantity at which revenues and costs are equal, or two alternatives are equivalent (13.1).
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| Book value | BV - Remaining capital investment in an asset after depreciation is
accounted for (16.1).
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| Capital budget | b - Amount of money available for capital investment
projects (12.1).
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| Capital recovery | CR or A - Equivalent annual cost of owning an asset plus the required return on the initial investment (6.2).
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| Capitalized cost | CC or P - Present worth of an alternative that will last forever (or a long time) (5.5).
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| Cash flow | CF - Actual cash amounts which are receipts (inflow) and
disbursements (outflow) (1.10).
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| Cash flow before or after taxes | CFBT or CFAT - Cash flow amount before relevant taxes or after taxes are applied (17.2).
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| Composite rate of return | i' - Unique rate of return when a reinvestment rate c is applied to a multiple-rate cash flow series (7.5).
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| Cost estimating relationships | C2 or CT - Relations that use design variables and changing costs over time to estimate current and future costs (15.3–4).
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| Cost of capital | i or WACC - Interest rate paid for the use of capital funds; includes both debt and equity funds. For debt and equity considered, it is weighted average cost of capital (10.2–3).
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| Debt-equity mix | D-E - Percentages of debt and equity investment capital used by a corporation (1.9, 10.3).
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| Depreciation | D - Reduction in the value of assets using specific models and rules; there are book and tax depreciation methods (16.1).
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| Depreciation rate | dt - Annual rate for reducing the value of assets using depreciation models (16.1).
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| Economic service life | ESL or n - Number of years at which the AW of costs is a minimum (11.2).
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| Expected value (average) | x‾, μ or E(X) - Long-run expected average if a random variable is sampled many times (18.3, 19.4).
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| Expenses | E - All corporate costs incurred in transacting business (17.1).
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| First cost | P - Total initial cost—purchase, construction, setup, etc. (1.3, 16.1).
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| Future amount or worth | F or FW - Amount at some future date considering time value of money (1.7).
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| Gradient, arithmetic | G - Uniform change (+ or -) in cash flow each time period
(2.5, 3.3–4).
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| Gradient, geometric | g - Constant rate of change (+ or -) each time period (2.6).
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| Gross income | GI - Income from all sources for corporations or individuals (17.1).
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| Inflation rate | f - Rate that reflects changes in the value of a currency over time (14.1).
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| Interest rate | i or r - Interest expressed as a percentage of the original amount per time period; nominal (r) and effective (i) rates (1.4, 4.1).
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| Life (estimated) | n - Number of years or periods over which an alternative or asset will be used; the evaluation time (1.7).
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| Life-cycle cost | LCC - Evaluation of costs for a system over all stages: feasibility
to design to phaseout (5.7).
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| Measure of worth | Varies - Value, such as PW,AW, i*, used to judge economic viability (1.2).
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| Minimum attractive rate of return | MARR - Minimum value of the rate of return for an alternative to be financially viable (1.9, 10.2).
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| Net cash flow | NCF - Resulting, actual amount of cash that flows in or out during a time period (1.10).
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| Net present value | NPV - Another name for the present worth, PW.
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| Payback period | np - Number of years to recover the initial investment and a stated rate of return (5.6).
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| Present amount or worth | P or PW - Amount of money at the current time or a time denoted as present (1.7, 5.1).
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| Probability distribution | P(X) - Distribution of probability over different values of a variable (19.2).
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| Random variable | X - Parameter or characteristic that can take on any one
of several values; discrete and continuous (19.2).
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| Rate of return | i* - Compound interest rate on unpaid or unrecovered balances such that the final amount results in a zero balance (7.1).
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| Recovery period | n - Number of years to completely depreciate an asset (16.1).
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| Salvage value | S - Expected trade-in or market value when an asset is traded or disposed of (16.1).
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| Standard deviation | s or σ - Measure of dispersion or spread about the expected value or average (19.4).
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| Taxable income | TI - Amount upon which income taxes are based (17.1).
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| Tax rate | T - Decimal rate, usually graduated, used to calculate corporate or individual taxes (17.1).
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| Time | t - Indicator for a time period (1.7).
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| Value added | EVA - Economic value added reflects net profit after taxes (NPAT)
after removing cost of invested capital during the year (17.8).
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2002 McGraw-Hill Higher Education