ENGINEERING ECONOMY - M5zn

1 ENGINEERING ECONOMY Seventh EditionSeventh Edition i1/14/11 8:28 PM1/14/11 8:28 ii1/14/11 8:28 PM1/14/11 8:28 PMSeventh Edition ENGINEERING ECONOMY Leland Blank , P. E. Texas A & M University American University of Sharjah, United Arab Emirates Anthony Tarquin , P. E. University of Texas at El Paso Seventh EditionTM iii1/14/11 8:28 PM1/14/11 8:28 PM ENGINEERING ECONOMY : SEVENTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc.

2 , 1221 Avenue of the Americas, New York, NY 10020. Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions 2005, 2002, and 1998. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

3 This book is printed on recycled, acid-free paper containing 10% postconsumer waste. 1 2 3 4 5 6 7 8 9 0 QDB/QDB 1 0 9 8 7 6 5 4 3 2 1 ISBN 978-0-07-337630-1 MHID 0-07-337630-2 Vice President & Editor-in-Chief: Marty Lange Vice President EDP/Central Publishing Services: Kimberly Meriwether David Global Publisher: Raghothaman Srinivasan Sponsoring Editor: Peter E. Massar Senior Marketing Manager: Curt Reynolds Development Editor: Lorraine K.

4 Buczek Senior Project Manager: Jane Mohr Design Coordinator: Brenda A. Rolwes Cover Designer: Studio Montage, St. Louis, Missouri Cover Image: Brand X Pictures/PunchStock RF Buyer: Kara Kudronowicz Media Project Manager: Balaji Sundararaman Compositor: MPS Limited, a Macmillan Company Typeface: 10/12 Times Printer: Quad/Graphics-Dubuque All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.

5 Library of Congress Cataloging-in-Publication Data Blank, Leland T. ENGINEERING ECONOMY / Leland Blank, Anthony Tarquin. 7th ed. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-07-337630-1 (alk. paper) ISBN-10: 0-07-337630-2 1. ENGINEERING ECONOMY . I. Tarquin, Anthony J. II. Title. 2012 dc22 2010052297 iv1/14/11 8:28 PM1/14/11 8:28 PM This book is dedicated to Dr. Frank W. Sheppard, Jr. His lifelong commitment to education, fair fi nancial practices, international outreach, and family values has been an inspiration to many one person at a time.

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9 CourseSmart is an online resource where students can purchase the complete text online at almost half the cost of a traditional text. Purchasing the eTextbook allows students to take advantage of CourseSmart s web tools for learning, which include full text search, notes and highlighting, and email tools for sharing notes between classmates. To learn more about CourseSmart options, contact your sales representative or visit MCGRAW-HILL DIGITAL vi1/14/11 8:28 PM1/14/11 8:28 PMCONTENTSP reface to Seventh Edition xiiiLEARNINGSTAGE 1 THE FUNDAMENTALS Chapter 1 Foundations of ENGINEERING ECONOMY ENGINEERING Economics: Description and Role in Decision Making Performing an ENGINEERING ECONOMY Study Professional Ethics and Economic Decisions Interest Rate and Rate of Return Terminology and Symbols Cash Flows.

10 Estimation and Diagramming Economic Equivalence Simple and Compound Interest Minimum Attractive Rate of Return Introduction to Spreadsheet Use 27 Chapter Summary 31 Problems 31 Additional Problems and FE Exam Review Questions 35 Case Study Renewable Energy Sources for Electricity Generation 36 Case Study Refrigerator Shells 37 Chapter 2 Factors.