ABSTRACT
Engineering economics* is the application of accumulated knowledge in engineering and economics to identify alternative uses of resources and to select the best course of action from an economics point of view. Resources refer to time, labor, expertise, materials, money, equipment, etc. Generally, engineering economics deals with capital allocation; that is, which of many available investment alternatives should be selected in order to maximize the long-term wealth of the enterprise. Common key attributes of engineering economics are the time value of money, evaluation of assets, depreciation, taxes, and ination. The problems addressed by engineering economics are very important to the enterprise; however, the cost analysis necessary for determining the manufacturing and life cycle costs of specic products is usually outside the scope of traditional engineering economics.
