Engineering Economic Flashcards
What is the BV?
Book value is the value of an asset ( in the future )
What is capitalized cost?
Capitalized costs are present worth values using an assumed perpetual period of time
What is Breakeven Analysis?
It’s the number of units that have to be sold to cover the costs.
What are Benefit-coat analyses?
It’s to determine if the project is economically acceptable.
what is Sunk Cost?
It’s a past cost that already has been spent and has no potential to recovery in the future.
Which concepts rely on the future and present value?
they are Book value - Breakeven Analysis - Benefit-coat.
What is depreciation?
It’s a loss of value.
What is taxable income?
Taxable income is total income less depreciation and ordinary expenses. Expenses do not include capital items, which should be depreciated.
What is the bond value?
Bond value equals the present worth of the payments the purchaser (or holder of the bond) receives during the life of the bond at some interest rate i.
MACRS
Modified Accelerated Cost Recovery System
Rate-of-Return
The rate of return on an investment is the interest rate that makes the benefits and costs equal.
MARR
The minimum acceptable rate-of-return
The salvage value
The salvage value would be FW benefits because it is a future value and it is benefit (revenue)
