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Engineering Economics - MIT OpenCourseWare

Engineering Economics - MIT OpenCourseWare

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Cost Concepts: Nomenclature • Capital – Wealth (money or property) that can be used to produce more wealth • Sunk cost – Expense which has happened in the past. No relevance to alternatives being considered. • Opportunity cost – Cost / value of the best rejected alternative • Fixed cost – Magnitude does NOT vary with changes in level of activity (output) -

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