Engineering Economics

Throughout this textbook, we will use a number of technical and shorthand terms to explain business, economic, and financial concepts. The terms are explained as they are introduced in the textbook chapters, but a number of them will be listed here so that the reader may become familiar with them before plunging into the technical topics or refer to this section for reminders.
There are few engineering projects undertaken that do not have the cost of the project as a major, if not the most important, factor in the decision to undertake the project. The cost of the project is weighed against the potential for profit or the benefits that the project may provide. While we could envision projects in our personal lives such as remodeling our houses, or deciding if its more economical to repair our car versus buying a replacement, the projects we undertake as engineers are often much larger in scope and cost. The scale of projects in engineering can be in the 100’s of millions of dollars for significant infrastructure projects; consider, for example, the electricity grid and modernization for renewable energy sources, the transportation network, and natural resource projects such as mines, mills, and petroleum facilities.