ENGINEERING ECONOMICS subset of economics for application to engineering projects.

Engineering economics is a challenging subject as it requires some level of technical expertise in engineering.

For economics students solving engineering economics assignments

problems often gets troublesome and they end up either doing them wrong

or seeking help from companies that charge them exorbitantly high

Engineering economics, earlier known as engineering economy

Is a subset of economics for application to engineering projects. Engineers look for solutions to problems, and the feasibility on the economic front of each possible solution is normally weighed along with the technical aspects.

In the curriculum of some U.S. programs, engineering economics is often a necessary course. It is a topic dwelling upon the Fundamentals of Engineering examination, and questions might also be framed on the Principles and Practice of Engineering examination; both are part of the Professional Engineering registration process.

Considering the time value of money is vital to most engineering economic analyses. Cash flows are discounted using an interest rate, I except in the most basic economic studies.

For every problem,

there are generally quite a few possible alternative solutions. One alternative that must be considered in each analysis, and is often the adopted choice, is the option of doing nothing.

The opportunity cost of making one choice in preference to another must also be considered. There are also noneconomic factors to be considered, like colour, style, public image, etc.; such factors are termed attributes.

Costs as well as revenues are to be considered, for each option, for an analysis period that is either a fixed number

of years or the projected life of the project. The salvage value is often forgotten, but is vital, and is either the net

cost or revenue for decommissioning the project.

Some other topics that may be considered in engineering economics are

inflation uncertainty replacements depreciation Resource depletion

taxes tax credits accounting cost estimations or capital financing

All these topics are the most important skills and primary knowledge areas in the field of cost engineering.

Since engineering is a vital part of the manufacturing sector of

the economy, engineering industrial economics is a pivotal part of industrial or business economics.

Major topics in engineering industrial economics are:

the economics of the management, operation, and growth and profitability of engineering firms;

macro-level engineering economic trends and issues;

engineering product markets and demand influences; and

the development, marketing, and financing of new engineering technologies and product.

Benefit to cost ratio (B/C)

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