Engineer-In-Training Exam File Eleventh Edition Donald G. Newnan, Ph.D., PE. Dean Newnan, Ph.D. ENGINEERING PRESS, INC. SAN JOSE, CALIFORNIAThe first nine editions were titled ENGINEER/IN-TRAINING LICENSE REVIEW ©Copyright 1990, Engineering Press, Inc. All rights reserved. Reproduction or translation of any part of this work beyond that permitted by ‘Sections 107 or 108 of the 1976 United States Copyright Act without permission of the copyright ‘owner is unlawful. Printed in the United States of America 5 4 3 2 4 Library of Congress Cataloging-in-Publication Data Newnan, Donald 6. Engineer.intralning exam flle / Donald G. Newnan, Dean Newnan, 1th ed Pom, = (Exam file series) Provious ed. C. Dean Newnan’s name appeared first on tp. ISBN 0.910854.78-1 1. Engineering-Examinations, questions, ete. 2, Engineering Problems, exercises, etc. |. Nownan, C. Dean, I, Title IM. Series, TAISI.NGIS 1990 .620:0076-e20, so2se1s oP Engineering Press, Inc. P.0. Box 1. San Jose, California 95103-000113 ENGINEERING ECONOMICS We begin this chapter with a brief review of engineering economics. ‘The topics cover the full range of what has appeared on past Engineer-In-Training exams, plus four topics that are likely to appear in the future: Geometric gradient; Rate of retum analysis of three alternatives; Benefit—cost ratio; After-tax economic analysis. ‘There are 26 example problems scattered throughout the engineering economics review. ‘These examples are an integral part of the review and should be worked to completion as you come to them. CASH FLOW ‘The field of engineering economics uses mathematical and economi systematically analyze situations which pose alternative courses of action. "The initial step in engineering economics: problems is to resolve a situation, or each alternative course in a given situation, into its favorable and unfavorable consequences o factors. These are then measured in some common unit—usually money. Those factors which cannot readily be reduced to money are called intangible, or irreducible, factors. Intangible or irreducible factors are not included in any monetary analysis but are considered in conjunction with such an analysis when making the final decision on proposed courses of action. techniques to 267