ABSTRACT
This chapter discusses the basic principles of engineering economics and illustrates their applications to industrial projects involving costs and benefits. Engineering economics is a specialty of economics which focuses on engineering projects. It deals with the economic aspects of product, equipment, service, or technical support. Its knowledge is “a must” for engineers and engineering technologists—in fact for all technical and management professionals. The overall economic climate and government policies also play critical roles in the prevailing range of interest rates. Interest rate is a measure of the interest for a given loan during the loan period. The interest rate also depends on the credit-worthiness of the borrower, that is, on the risk involved in lending as judged by the lender. The overall economic climate and government policies also play critical roles in the prevailing range of interest rates.
