ETS/Theodore Tutorials


Engineering Economics and Finance
A Self-Instructional Problem Workbook

Louis Theodore and Kristina M. Neuser
Department of Chemical Engineering
Manhattan College, Riverdale NY

Published by ETS Professional Training Institute
1996 Louis Theodore. 258 pages. ISBN 1-882767-19-5.


Table of Contents

Basic Operations
Simple Interest Compound Interest Present Worth Evaluation of Sums of
Money Depreciation Fabricated Equipment Cost Index Capital Recovery Factor Perpetual Life Break-even Point Approximate Rate of Return Exact Rate of Return Bonds Incremental Cost Minimum Cost Numerical Integration Numerical Differentiation Newton-Raphson Method Runge-Kutta Linear Regression Analysis

Problems
Principles
Sums of Money (SOM)
SOM 1: Installment Size of Semiannual Loan Payments
SOM 2: Discharging of a Mortgage at any Time Prior to the Endpoint

Interest (INT)
INT 1: Repayment of a Loan Through Deposits to a Savings Account
INT 2: Payment Period with a Different Interest Period
INT 3: Borrowing Against Future Income
INT 4: Deferred Investments
INT 5: Modified Method of Deferred Investment
INT 6: Deductions from a Purchase Price

Depreciation (DEP)
DEP 1: Straight Line Depreciation
DEP 2: Sinking Fund Depreciation

Annual Cost (ANC)
ANC 1: Alternate Proposals with Differing Service Lives
ANC 2: Service Life and Return on Investment
ANC 3: Warranted Extra Expenditure
ANC 4: Ownership vs. Rental of Utilities
ANC 5: Variable Annual Cost
ANC 6: Additional Theater Attendance and Warranted Extra Expenditure

Capitalized Cost (CAP)
CAP 1: Cost Comparisons with Different Lifetimes
CAP 2: Perpetual Life and Capital Recovery

Rate of Return (ROR)
ROR 1: Rate of Return and Simple Interest
ROR 2: Rate of Return on an Extra Investment

Bonds (BND)
BND 1: Bond Purchase Price
BND 2: Amount of Bond Issue

Applications
Domestic (DOM)
DOM 1: Present Worth Factor and Periodic Deposit
DOM 2: Depreciation and Appraisal Value
DOM 3: Annual Cost Comparison Using Straight Line Depreciation
DOM 4: Present and Future Income
DOM 5: Choosing Between New and Existing Equipment
DOM 6: Uniform Annual Sale and the Break-Even Point
DOM 7: Depreciation of a Home and its Equipment with Separate Corresponding Useful Lifetimes DOM 8: Amortization of an Initial Purchase and its Replacement

Real Estate (RES)
RES 1: Justifiable Expense for Annual Savings
RES 2: Annual Cost and Gross Revenue Comparison
RES 3: Percentage of Operating Capacity to Break Even
RES 4: Perpetual Life and the Comparison of Alternate Highway Proposals
RES 5: Annual Tax on Public vs. Private Ownership of a Sewer Treatment Plant
RES 6: Comparison of Alternate Proposals on the Basis of Present Worth

Industrial (IND)
IND 1: Purchase vs. Licensing of a Patent
IND 2: Straight Line Appraisal with Sinking Fund Depreciation
IND 3: Comparison of Alternate Proposals with the Inclusion of Electricity Requirements
IND 4: Optimization of a Bridge's Span Length through Minimum Cost
IND 5: Kelvin's Law and the Optimum Number of Parts per Lot
IND 6: Economic Lot Size per Order
IND 7: Break-even Point of Enameled vs. Tinned Wire
IND 8: Deferred Maintenance Costs

Utilities (UTL)
UTL 1: Revision of a Payment Schedule
UTL 2: Variation of Appraisal Value with Time
UTL 3: Insulation Thickness and Energy Loss
UTL 4: Bond Amortization
UTL 5: Replacement of an Electric Plant Not in Kind
UTL 6: Fixed and Variable Cost of a Power Plant

Environmental (ENV)
ENV 1: Baghouse Annualized Capital, Operating and Maintenance Costs
ENV 2: Liquid Injection vs. Rotary Kiln Economic Comparison
ENV 3: Equipment Options
ENV 4: Distillation vs. Extraction Comparison

Solutions to Problems

Appendix: Glossary of Abbreviations

Index

Copyright 1999, ETS Incorporated



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