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Engineering Economic Decisions - Coggle Diagram
Engineering Economic Decisions
Types of Business
Sole-proprietorship
Partnership
Corporation
Roles of Engineers in Business
Create and design engineering projects
Analysis
Production methods
Engineering safety
Environmental impacts
Market
Evaluate
Profitability
Timing of cash flows
Degree of financial risk
Impact on financial statements
Firm's market value
Stock price
Factors in Engineering Economic Decisions
Time
Uncertainty
Accounting and Engineering Economy
Accounting: evaluation of past performance
Engineering economy: prediction of future events
Use past evaluations to predict future
Fundamental Principles of Engineering Economics
A dollar earned today is worth more than a dollar earned in the future.
The only thing that matters is the difference between alternatives.
Marginal revenue must exceed marginal cost.
Additional risk is not taken without the expected additional return.