Engineering Economics Concept 3

Question 1

Future amount or worth

Answer 1

F or FW - Amount at some future date considering time value of money (1.7).

Question 2

Geometric gradient series

Answer 2

A series of cash flows in which each consecutive cash flow is larger or smaller than the previous by a percentage.

Question 3

Gradient, arithmetic

Answer 3

G - Uniform change (+ or -) in cash flow each time period (2.5, 3.3–4).

Question 4

Gradient, geometric

Answer 4

g - Constant rate of change (+ or -) each time period (2.6).

Question 5

Gross income

Answer 5

GI - Income from all sources for corporations or individuals (17.1).

Question 6

Inflation

Answer 6

An increase in the price level of goods and services in an economy over time. Negative inflation (i.e. decrease in the price level over time) is called deflation.

Question 7

Inflation rate

Answer 7

f - Rate that reflects changes in the value of a currency over time (14.1).

Question 8

Interest

Answer 8

the cost of borrowing money. It is the amount of money that is paid in addition to the amount borrowed, loaned or invested.

Question 9

Interest rate

Answer 9

i or r - Interest expressed as a percentage of the original amount per time period; nominal (r) and effective (i) rates (1.4, 4.1).

Question 10

Linear gradient series

Answer 10

A series of cash flows in which each consecutive cash flow is larger or smaller than the previous by a constant dollar amount.

Question 11

Life (estimated)

Answer 11

n - Number of years or periods over which an alternative or asset will be used; the evaluation time (1.7).

Question 12

Life-cycle cost

Answer 12

LCC - Evaluation of costs for a system over all stages: feasibility to design to phaseout (5.7).