Engineering Economic Analysis

A

Absorption costing, 548
.ccounting: absorption costing, 548
acid-test or quick ratio, 543~
assets, 541-42
balance sheet, 541~
cost, 541
cost of goods sold, 544
current ratio, 543
direct costs, 548
equity, 543
financial ratios from balance sheet, 543~
financial ratios from income statement, 546
fundamental accounting equation, 541
general, 541
income statement, 544-47
indkect cost allocation, 548-49
indirect costs, 548
interest coverage, 546
liabilities, 542
linking balance sheet and income statement, 546-47
net profit ratio, 546
problems with traditional cost accounting, 549-50
role of, 540-41
traditional cost accounting, 547-50
working capital, 542
After-tax: cash flows and spreadsheets, 385-86
economic analysis, 380-83
inflation, 460-62
ininimum cost life problems, 427-28
rate of return estimating, 385
replacement analysis, 420-27
Amortization schedule, 190
Analysis period: common multiple of lives, 186
for continuing requkement, 186
different from lives, 151-54
infinite, 154-57, 187-88
lives equal, 147-51, 186

other, 188-89

rate ofreturn, 219

Annual cash flow calculations, 178-82

Arithmetic gradient, 98-100

present worth factor, 100

uniform series factor, 100

Asset depreciation range (ADR), 347

Assets, 541-42

Audit results, 15

Average cost, 28

B

Balance sheet, 541 ~

links with income statement, 546-47

Benefi~costratio,490,496-98

analysis, 274-80

graph, 247-49, 251, 252,257, 260-61, 278,279

incremental analysis, 498-504

Benefits estimating, 50

Beta approximation of mean, 308

Book cost, 36

Book value, 341

Brainstorming, 11

Breakevenanalysis,285-89 ..

chart, 31-32, 285

spreadsheets, 289-92

Business expenses, 374

c

Capital budgeting, 518

Capital expenditures, 374

Capital gains, 356-57

and losses, 384

Capital rationing, 518-32

by present worth method~, 524-30

593