Engineering Economic Analysis

594 INDEX

Capitalrationing-Cont.
ranking project proposals, 530-32
by rate of return, 521-24
Capitalized cost, 154-57
Cash cost, 35
Cash flow: categories, 51
computing, 62-63
diagrams, 50-52, 75-76
Challenger, 400
after-tax cash flows, 422
future, 419-20
minimum cost life, 402-4
Chance node, 316
Compound interest, 65-66
Compounding subperiods; 109
Constant dollars, 444
versus then-current dollars, 448-50
Consumer price index, 454-55
-:ontinuous alternatives benefit-cost ratio graph, 279
Continuous compounding, 115-21
capital recovery factor, 118
compound amount factor, 117
effective interest rate, 110
present worth factor, 117
series compound amount factor, 119
series present worth factor, 119
sinking fund factor, 118
Continuous uniform cash flow with continuous
compounding 120-21
Corporate income taxes: after-tax analysis, 380-83
after-tax cash flows and spreadsheets, 385-86
business expenses, 374
capital expenditures, 374
capital gains and losses, 384
estimating after-tax rate of return, 385
investment tax credit, 384-85
rates, 377-78
taxable income, 374-75
20staccounting, 547-50
problems with traditional, 549-50
Cost: average, 28
book,36
of borrowed money, 475
of capital, 475-76
cash,35
depletion, 360-61
estimating, 38-49
fixed, 28
of goods sold, 544
incremental, 34-35
indexes, 44-45
life-cycle, 36-38
life-cycle committed, 37
life-cycle design change, 37
marginal, 28-29

nonrecurring, 34

opportunity, 32-33

recurring, 34

sunk, 32

variable, 28

Cost-push inflation, 441

Cutoff rate of return, 523

D

Data block in spreadsheets, 555

Decision node, 316

Decision-making process, 6-15

Declining balance depreciation, 346-47

Defender, 400

after-tax cash flows, 422-27

lowest EUAC, 411-13

marginal cost data, 404-7

marginal cost data not available, 415-18

marginal costs are increasing, 407-13

marginal costs not increasing, 41;3-15

Deflation definition, 440

Demand-pull inflation, 441

Depletion, 360-62, 400

Depreciable life, 339

Depreciated versus expensed, 339

Depreciation, 546

asset disposal, 356-59

basics,338-41

calculation fundamentals, 341-42

capital gains, 356-57

declining balance, 346-47

historical methods, 342-47

historical methods compared with

MACRS, 355-56

losses, 356-57

MACRS (see MACRS)

recapture, 356-57

spreadsheets, 362-64

straight-line, 342-44

sum-of-years' -digits, 344-45

unit -of-production, 359-60

Descartes' rule of signs, 231-32

Deterioration due to aging, 400

Direct costs, 548

..

E

Economic criteria

fixed input, 12, 146, 182

benefi~costratio,274

fixed output, 12, 146, 182

benefi~costratio,274