Engineering Economy Flashcards
The recorded current value of an asset
book value
Ratio of interest payment to the principal for a given unit of time
interest rate
Method of depreciation whereby the amount to recover is spread over the estimated life of the asset in terms of periods or units of output
straight line method
Interest earned by an investmet
rate of return
Estimated value at the end of useful life
Salvage value
Artificial expense that spreads the purchase price of an asset or other property over a number of years
Depreciation
Interest rate at which the present worth of cash flow on a project is zero
rate of return
Lessening of the value of an asset due to decrease in the quantity available. Refers to natural resources
Depletion
Method of depreciation where a fixed sum of money is regularly deposited at compound interest in a real or imaginary fund in order to accumulate an amount equal to the total depreciation of an asset at the end of the asset’s estimated life
Sinking fund method
Term used to express the series of uniform payments occurring at equal interval of time
Annuity
