Engineering Economics Concept 1 Flashcards

1
Q

Annual amount or worth

A

A or AW - Equivalent uniform annual worth of all cash inflows and outflows over estimated life (1.7, 6.1).

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2
Q

Annual operating cost

A

AOC - Estimated annual costs to maintain and support an alternative (1.3).

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3
Q

Benefit/cost ratio

A

B/C - Ratio of a project’s benefits to costs expressed in PW, AW, or FW terms (9.2).

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4
Q

Breakeven point

A

QBE - Quantity at which revenues and costs are equal, or two alternatives are equivalent (13.1).

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5
Q

Book value

A

BV - Remaining capital investment in an asset after depreciation is accounted for (16.1).

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6
Q

Capital budget

A

b - Amount of money available for capital investment projects (12.1).

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7
Q

Capital recovery

A

CR or A - Equivalent annual cost of owning an asset plus the required return on the initial investment (6.2).

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8
Q

Capitalized cost

A

CC or P - Present worth of an alternative that will last forever (or a long time) (5.5).

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9
Q

Cash flow

A

CF - Actual cash amounts which are receipts (inflow) and disbursements (outflow) (1.10).

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10
Q

Cash flow diagram

A

A diagram showing the timing and value of cash inflows and outflows, as viewed from one party’s perspective.

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11
Q

Cash flow before or after taxes

A

CFBT or CFAT - Cash flow amount before relevant taxes or after taxes are applied (17.2).

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12
Q

Composite rate of return

A

i’ - Unique rate of return when a reinvestment rate c is applied to a multiple-rate cash flow series (7.5).

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