Description

Features

• Case studies with end-of-chapter questions encourage writing and critical thinking.

• TestGen testbank consists of well-crafted assessment questions which are representative of problems found throughout the textbook. Professors can regenerate algorithmically-generated variables within each problem to offer students a virtually unlimited number of paper or online assessments. Additionally, instructors can view, select, and edit testbank questions or create their own questions. To learn more about TestGen, please visit: http://www.pearsonhighered.com/testgen  

• Fundamentals of Engineering Exam multiple-choice questions appear at the end of each chapter.

• Spreadsheets are integrated throughout the text. In particular, many examples include handworked and computer solutions (with spreadsheets) so that students can see both techniques side by side.  There are new end-of-chapter spreadsheet problems as well, and spreadsheet templates.

• A brief basic review of simple accounting principles is included.

• Cost estimating is further emphasized in the text.

• An expanded treatment of the economic aspects of engineering design is featured.

• Economic value is explained in terms of a project's after-tax cash flows. This provides students with information regarding a new approach to measuring profitability.

• Material on the cost of capital explains the cost of equity and debt capital as well as the weighted average cost of capital and its relationship to rate of return concepts. This enables students to understand how engineering projects add economic value to a company.

• Real-world engineering economy analysis methodology helps students develop proficiency with methodology and processes for making rational decisions in situations likely to be encountered in professional practice.

• Case studies demonstrate the integrated application of the principles, basic concepts, and methodology used by engineers in typical, real-world situations. This allows students to see how concepts are applied in the real world.

• Cost estimating, design economics, and electronic spreadsheets provide students with comprehensive, thorough coverage of essential skills and concepts behind engineering economy.

• The theoretical and practical aspects of selecting among capital investments are examined, teaching students to select the most profitable projects to benefit a company's bottom line.

• Internet-accessible electronic spreadsheets provide approximately 50 basic templates for all major topics in the text, and summarize formulas and key concepts. These give students a ready source of information for quick reference and review, eliminating the need to create basic spreadsheets, thereby saving time.

• A multitude of examples help students to more readily understand concepts and reinforce learning.

• A comprehensive instructor's manual is available to adopting professors.

New To This Edition

• Fifty percent of end-of-chapter problems are new or revised

• TestGen testbank consists of well-crafted assessment questions which are representative of problems found throughout the textbook. Professors can regenerate algorithmically-generated variables within each problem to offer students a virtually unlimited number of paper or online assessments. Additionally, instructors can view, select, and edit testbank questions or create their own questions. To learn more about TestGen, please visit: http://www.pearsonhighered.com/testgen  

• Chapter openers with related photographs are inviting to instructors and students.

• Most end-of-chapter problems feature an instructive/informative nature.

• The authors use friendly, “down home” language to encourage students to read the book.

Table of Contents

1.1 Introduction 2

1.2 The Principles of Engineering Economy 3

1.3 Engineering Economy and the Design Process 6

1.4 Using Spreadsheets in Engineering

Economic Analysis 15

1.5 Summary 15

2.1 Cost Terminology 20

2.2 The General Economic Environment 27

2.3 Cost-Driven Design Optimization 37

2.4 Present Economy Studies 42

2.5 Case Study–The Economics of Daytime

Running Lights 51

2.6 Summary 53

2-A-1 Accounting Fundamentals 62

3.1 Introduction 72

3.2 An Integrated Approach 74

3.3 Selected Estimating Techniques (Models) 82

3.4 Parametric Cost Estimating 87

3.5 Cost Estimation in the Design Process 98

3.6 Case Study–Demanufacturing of Computers 106

3.7 Summary 108

4.1 Introduction 115

4.2 Simple Interest 116

4.3 Compound Interest 117

4.4 The Concept of Equivalence 117

4.5 Notation and Cash-Flow Diagrams and Tables 120

4.6 Relating Present and Future Equivalent Values

of Single Cash Flows 124

4.7 Relating a Uniform Series (Annuity) to its Present

and Future Equivalent Values 130

4.8 Summary of Interest Formulas and Relationships

for Discrete Compounding 141

4.9 Deferred Annuities (Uniform Series) 142

4.10 Equivalence Calculations Involving Multiple

Interest Formulas 144

4.11 Uniform (Arithmetic) Gradient of Cash Flows 150

4.12 Geometric Sequences of Cash Flows 156

4.13 Interest Rates that Vary with Time 161

4.14 Nominal and Effective Interest Rates 163

4.15 Compounding More Often than Once

per Year 165

4.16 Interest Formulas for Continuous Compounding

and Discrete Cash Flows 168

4.17 Case Study–Understanding Economic

“Equivalence” 171

4.18 Summary 174

5.1 Introduction 191

5.2 Determining the Minimum Attractive Rate

of Return (MARR) 192

5.3 The Present Worth Method 192

5.4 The Future Worth Method 201

5.5 The AnnualWorth Method 202

5.6 The Internal Rate of Return Method 206

5.7 The External Rate of Return Method 217

5.8 The Payback (Payout) Period Method 220

5.9 Case Study–A Proposed Capital Investment

to Improve Process Yield 222

5.10 Summary 223

5-A-1 The Multiple Rate of Return Problem

with the IRR Method 234

6.1 Introduction 239

6.2 Basic Concepts for Comparing Alternatives 239

6.3 The Study (Analysis) Period 243

6.4 Useful Lives are Equal to the Study Period 245

6.5 Useful Lives are Unequal among

the Alternatives 264

6.6 Personal Finances 276

6.7 Case Study–Ned and Larry’s Ice

Cream Company 280

6.8 Postevaluation of Results 283

6.9 Summary 283

7.1 Introduction 301

7.2 Depreciation Concepts and Terminology 301

7.3 The Classical (Historical) Depreciation Methods 304

7.4 The Modified Accelerated Cost Recovery System 309

7.5 A Comprehensive Depreciation Example 316

7.6 Introduction to Income Taxes 320

7.7 The Effective (Marginal) Corporate

Income Tax Rate 323

7.8 Gain (Loss) on the Disposal of an Asset 326

7.9 General Procedure for Making

After-Tax Economic Analyses 327

7.10 Illustration of Computations

of ATCFS 331

7.11 Economic Value Added 343

7.12 Summary 345

8.1 Introduction 357

8.2 Terminology and Basic Concepts 358

8.3 Fixed and Responsive Annuities 364

8.4 Spreadsheet Application 369

8.5 Foreign Exchange Rates and Purchasing

Power Concepts 371

8.6 Case Study–Selecting Electric Motors to Power

an Assembly Line 376

8.7 Summary 379

9.1 Introduction 390

9.2 Reasons for Replacement Analysis 390

9.3 Factors that Must be Considered

in Replacement Studies 391

9.4 Typical Replacement Problems 394

9.5 Determining the Economic Life of a New

Asset (Challenger) 397

9.6 Determining the Economic Life of a Defender 401

9.7 Comparisons in which the Defender’s Useful Life

Differs from that of the Challenger 404

9.8 Retirement without Replacement (Abandonment) 407

9.9 After-Tax Replacement Studies 408

9.10 Case Study–Replacement of a Hospital’s Emergency

Electrical Supply System 418

9.11 Summary 421

10.1 Introduction 432

10.2 Perspective and Terminology for Analyzing

Public Projects 433

10.3 Self-Liquidating Projects 434

10.4 Multiple-Purpose Projects 434

10.5 Difficulties in Evaluating Public-Sector Projects 437

10.6 What Interest Rate Should Be Used

for Public Projects? 438

10.7 The Benefit—Cost Ratio Method 440

10.8 Evaluating Independent Projects by B—C Ratios 446

10.9 Comparison of Mutually Exclusive Projects

by B—C Ratios 448

10.10 Criticisms and Shortcomings

of the Benefit—Cost Ratio Method 453

10.11 Case Study–Improving a Railroad Crossing 455

10.12 Summary 457

11.1 Introduction 466

11.2 Breakeven Analysis 466

11.3 Sensitivity Analysis 473

11.4 Multiple Factor Sensitivity Analysis 479

11.6 Summary 486

12.1 Introduction 496

12.2 Sources of Uncertainty 497

12.3 The Distribution of Random Variables 497

12.4 Evaluation of Projects with Discrete Random Variables 501

12.5 Evaluation of Projects with Continuous

Random Variables 510

12.6 Evaluation of Uncertainty By

Monte Carlo Simulation 515

12.7 Performing Monte Carlo Simulation

with a Computer 519

12.8 Decision Trees 523

12.9 Real Options Analysis 532

12.10 Case Study–The Oils Well That Ends Well Company 535

12.11 Summary 539

13.1 Introduction 549

13.2 Debt Capital 551

13.3 Equity Capital 552

13.4 TheWeighted Average Cost of Capital (WACC) 555

13.5 Project Selection 559

13.6 Postmortem Review 563

13.7 Budgeting of Capital Investments

and Management Perspective 564

13.8 Leasing Decisions 565

13.9 Capital Allocation 567

13.10 Case Study–Financing an Automobile 575

13.11 Summary 578

14.1 Introduction 582

14.2 Examples of Multiattribute Decisions 582

14.3 Choice of Attributes 584

14.4 Selection of a Measurement Scale 584

14.5 Dimensionality of the Problem 585

14.6 Noncompensatory Models 585

14.7 Compensatory Models 590

14.8 Summary 598

A Using Excel to Solve Engineering Economy

Problems 000

B Abbreviations and Notation 000

C Interest and Annuity Tables for Discrete

Compounding 000

D Interest and Annuity Tables for Continuous

Compounding 000

E Standard Normal Distribution 000

F Selected References 000

G Answers to Selected Problems 000

Courses

Engineering Economy  (Civil & Environmental Engineering)
Engineering Economy  (Industrial Engineering)

Next Edition(s)

• Engineering Economy, 15/E
  Sullivan, Wicks & Koelling
  ©2012  |  Prentice Hall  |  Cloth; 672 pp  |  Out of Stock
  ISBN-10: 0132554909  |  ISBN-13: 9780132554909
  Suggested retail price: $171.00  Net price: $128.25  (What's this?)Brief Description  | 

  

  For undergraduate, introductory courses in Engineering Economics.

  
  

  Used by engineering students worldwide, this best-selling text provides a sound understanding of the principles, basic concepts, and methodology of engineering economy. Built upon the rich and time-tested teaching materials of earlier editions, it is extensively revised and updated to reflect current trends and issues, with an emphasis on the economics of engineering design throughout. It provides one of the most complete and up-to-date studies of this vitally important field.

  More Info
  

Sample Chapters

Click on the links below to view a sample chapter

Chapter 2

Chapter 3

Backcover Copy

Engineering Economy

Fourteenth Edition

William G. Sullivan

Elin M. Wicks

C. Patrick Koelling

A succinct job description for an engineer consists of just two words: problem solver. Broadly speaking, engineers use knowledge to find new ways of doing things economically. Engineering design solutions do not exist in a vacuum, but within the context of a business opportunity. Truly, every problem has multiple solutions, so the question is, “How does one rationally select the design solution with the most favorable economic result?” The answer to this question can also be put forth in two words: engineering economy. This field of engineering provides a systematic framework for evaluating the economic aspects of competing design solutions. Just as engineers model the stress on a support column or the thermodynamic properties of a steam turbine, they must also model the economic impact of their engineering recommendations. Engineering economy is the subject of this textbook.

Highlights of Engineering Economy, Fourteenth Edition:

×        Fifty percent of end-of-chapter problems are new or revised.

×        A bank of algorithmically generated test questions is available to adopting instructors.

×        Fundamentals of Engineering (FE) exam-style questions are included among the end-of-chapter problem sets.

×        Spreadsheet models are integrated throughout.

×        An appendix on the basics of accounting is included in Chapter 2.

×        Chapter 3 on Cost Estimation appears early in the book.

×        An appendix on techniques for using Excel in engineering economy is available for reference.

×        Numerous comprehensive examples and case studies appear throughout the book.

×        Extended learning exercises appear in most chapters.

×        Personal finance problems are featured in most chapters.

×        Many pointers to relevant Web sites are provided.

ISBN-13: 978-0-13-614297-3

ISBN-10: 0-13-614297-4

Downloadable Instructor Resources

Show All Downloadable Files

Hide All Downloadable Files

|

Help Downloading Files

Excel Spreadsheet Examples from Text for Engineering Economy, 14/E
Sullivan, Wicks & Koelling
©2009  |  Prentice Hall  |  Website  |  Live
ISBN-10: 0136063411  |  ISBN-13: 9780136063414

Show Downloadable Files

Hide Downloadable Files

|

More Info

Instructor's Solutions Manual (Catalog Download), 14/E
Sullivan, Wicks & Koelling
©2009  |  Prentice Hall  |  On-line Supplement  |  Live
ISBN-10: 0136041302  |  ISBN-13: 9780136041306

Show Downloadable Files

Hide Downloadable Files

|

More Info

Lecture PPTs and Image PPTs for Engineering Economy, 14/E
Sullivan, Wicks & Koelling
©2009  |  Prentice Hall  |  On-line Supplement  |  Live
ISBN-10: 0136040721  |  ISBN-13: 9780136040729

Show Downloadable Files

Hide Downloadable Files

|

More Info

TestGen, 14/E
Sullivan, Wicks & Koelling
©2009  |  Prentice Hall  |  On-line Supplement  |  Live
ISBN-10: 0136054811  |  ISBN-13: 9780136054818
This online resource is available at no cost.

Show Downloadable Files

Hide Downloadable Files

|

More Info

Back to top

Back to top

Give your students a choice! PearsonChoices products are designed to give your students more value and flexibility by letting them choose from a variety of text and media formats to best match their learning style and their budget.

Pearson Higher Education offers special pricing when you choose to package your text with other student resources. If you're interested in creating a cost-saving package for your students, see the Packages Tab.

• Engineering Economy, CourseSmart eTextbook, 14/E
  Sullivan, Wicks & Koelling
  ©2009  |  Prentice Hall  |  Electronic Book; 696 pp  |  Available
  ISBN-10: 0135019214  |  ISBN-13: 9780135019214
  Online purchase price: $72.99Brief Description  | 

  

  CourseSmart eTextbooks are a creative digital solution that offers the freedom and convenience of online, offline, and mobile access using a single platform. With a CourseSmart eTextbook, students can:

  • search the text

  • make notes online

  • print out reading assignments that incorporate lecture notes

  • bookmark important passages for later review

  • save money. As an alternative to purchasing the print textbook, students can subscribe to the same content online for a significant discount off the suggested list price of the print text.

  For more information, or to subscribe to the CourseSmart eTextbook, visit www.coursesmart.com (for customers in U.S. and Canada) or www.coursesmart.co.uk (for customers in Europe, Middle East, and Africa).

  More Info  |  Students, buy access
  

• Pearson Custom Library: Engineering
  Pearson
  ©2010  |  Prentice Hall  |  On-line Supplement  |  Live
  ISBN-10: 0136118240  |  ISBN-13: 9780136118244
  This online resource is available at no cost at http://www.pearsoncustom.com/custom-library/pearson-custom-engineering.
  More Info
  

Pearson Higher Education offers special pricing when you choose to package your text with other student resources. If you're interested in creating a cost-saving package for your students contact your Pearson Higher Education representative.