Engineering Economic Analysis

596 INDEX

Insurance, 320-22, 323
Intangible consequ.ences, 10, 14
Intangible property, 340
Interest: compound, 65-66
formula notation, 73
on loan, 191
Interest rate: adjusting MARR for risk, 479-81
cost of capital, 475-76
difficulties in solving for, 229-40
effective, 109
equivalence, 71-73
inflation and cost of borrowed money, 481-82
MARR values used in industry, 482-83
nominal, 109
opportunity cost government, 495
opportunity cost of capital, 476-78
opportunity cost taxpayer, 495
plot versus PW, 209-10
real and market, 441-42
selecting, 474-85
selecting in public sector, 493-95
spreadsheets and opportunity cost of capital, 483-85
simple, 64-65
Internal rate of return, 204-5
modified, 238-40
Interpolation, 92, 208
Investment tax credit, 384-85
Itemized deductions, 373

J

Joint probabilitydistributions,311-13

L

Learning curve, 47-49

Liabilities, 542.

Life-cycle cost, 36-38

committed, 37

design change, 37

Liquidity or speed of return versus profitability, 282, 284

Lives: different from analysis period, 151-54

equal analysis period, 147-51

Loan: balance due, 191-92

paying off early, 192

repayment plans, 67, 69-71

Lorie and Savage, 524

M

MACRS, 347-53

compared to historical methods, 355-56

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examples, 353-54

percentage derivation, 351-53

percentage tables, 349-51

property class, 348-50

recovery period, 348-50

spreadsheet using VDB, 363-64

Marginal cost, 28-29

Marginal cost data defender, 404-7

Market consequences, 10, 14

Market interest rate, 441-42

Minimum attractive rate of return: selecting, 474-85, 479

spreadsheets, 483-85

Minimum cost life: after-tax, 427-28

challenger, 402-4

Modified accelerated cost recovery system (see MACRS)

Modified internal rate of return, 238-40

Money supply, 440

Most likely estimate, 306-8

Multiple alternatives, 158

Multiple rates of return, 231-32

how many, 234-38

Multiple sign changes projects with, 232-34

Mutually exclusive alternatives, 519

N

Nominal interest rate, 109

Nonrecurring cost, 34

o

Obsolescence, 338, 400

Opportunity cost, 32-33

of capital, 476-78, 495, 523

perspective for defender's first cost, 417-18

Optimistic estimate, 306-8

Outcome node, 316

p

Payback period, 280-84

limitations, 282

Percentage depletion, 361-62

Personal exemption, 373

Personal property, 340

Pessimistic estimate, 306-8

Power-sizing model, 45-46

Present worth: analysis with benefit-cost

graphs, 260-261

techniques, 147-62

Price indexes, 450-56

Probability, 308-9