Engineering Economic Analysis

After Completing ThisChapter...

The student should be able to:

· Define and apply thepresent worth criteria.

· Compare two competing alternative choices using present worth (PW).

·Apply the PW model in cases with equal, unequal, and infinite project lives,

. Compare multiple alternatives using the PW criteria.

. Develop and use spreadsheets to makepresent worthcalculations.

QUESTIONS TO CONSIDER.. )

1. So far, Boeinghas not been able to sell the Sonic Cruiseridea to airlines.Fast is good, they
   say, but cheap is better. Why isn't increased speed more attractive to airlines, especially
   overlong-haulflights?Can't airlineschargemorefor fasterflights?.


2. In many cases, air travelers actually spend as much time on the group.das in the air.
   Going through security,changing planes, clearing customs, and picking up baggage can
   collectively add hours to their travel time. How might this affect a traveler's decision
   about whether to pay more to fly on a faster plane like the Sonic Cruiser?


3. Airlines seem to be more interested in the new Airbus model. Can you state somereasons
   for this apparent preference?

~ ,~ ----