Solution Manual For Basics Of Engineering Economy, 2nd Edition

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1Solutions to end-of-chapter problemsBasics of Engineering Economy, 2ndeditionLeland Blank and Anthony TarquinChapter 1Foundations of Engineering Economy1.1If the alternative that is actually the best oneis not even recognized as analternative, it obviously will not be able to be selected by using any economicanalysis tools.1.2Non-economic factors are (b), (c), (e) and (f): morale, goodwill,publicacceptanceand aesthetics,respectively.1.3Revenues and costs are examples of cash flows.1.4The analysis techniques that are used in engineering economic analysis are onlyas good as the accuracy of the cash flow estimates.1.5The do-nothing alternative represents theas-isorstatus quocondition.1.6Evaluation criterion refers to the measurement standard or procedure that is usedto determine which alternative is “best”.1.7In engineering economy, the evaluation criterion is financial units (dollars, pesos,etc).1.8Intangible factors are non-economic considerations that may have to be taken intoaccount in identifying the best alternative.1.9Examples of intangible factors are goodwill, morale, convenience, friendship,implementation know-how, aesthetics, public acceptance1.10Time value of money means that there is a certain worth in having money and thatworth changes as a function of time.1.11Interest is a manifestation of the time value of money.1.12The most important fundamental dimension in economic analysis is time becauseof time value of money.1.13The term that describes compensation for “renting” of money is time value ofmoney, which manifests itself as interest.1.14When an interest rate does not include the time period, the time period is assumedto be one year.

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