Question

1.3 The analysis techniques that are used in engineer- ing economic analysis are only as good as what? 1.4 What is meant by the term evaluation criterion? 1.5 What evaluation criterion is used in economic analysis? 1.6 What is meant by the term intangible factors? 1.7 Give three examples of intangible factors. 1.8 Interest is a manifestation of what general concept in engineering economy?

Answer 1

Answer 1.3

The analysis techniques that are used in engineering economic analysis are only as good as the accuracy of the data it is based on.

Engineering economic analysis is the study of the desirability of making an investment.

Answer 1.4

Evaluation Criteria is the set of requirements that will be used to choose between multiple solutions; allow for a range of possible scores.

Answer 1.5

The evaluation criterion that is usually used in an economic analysis is Financial Unit (dollars or other currency)

Answer 1.6

In economics, an intangible factor is one you cant touch directly, but you value it.

Answer 1.7

Examples of the intangible factors of design are

• The knowledge each worker possess,
• the value of the team itself,
• individual experiences each member brings perspective.

Answer 1.8

The manifestation of the time value of money

• From borrower's perspective!
• Difference between an ending amount of money and a beginning amount of money

Interest=amount owed now - principal