STUDY GUIDE · GKU 2
Engineering economy study guide (Industrial Engineering)
Engineering economy turns a technical choice into a financial one. Money has a time value, so a cost today and a cost in five years cannot be added directly; interest factors move both to a common date. Cash-flow analysis then compares alternatives by present worth, annual cost or payback, while break-even analysis finds the volume at which a project stops losing money. The second half treats replacement and risk: when to keep an asset, when to replace it, and how expected value and sensitivity change the answer when the future is uncertain. Every section opens with a quick-revision card, and the worked examples run from easy to exam level.
Structured by the official ETEC subject standard for this topic: every listed topic and learning outcome, with formulas, figures and worked examples. The full sections are available to members in the app.
SKU 2.1 · Cash flow and break-even analysis
Time value, cash flow and break-even
Compound interest factors, present worth and annual worth, depreciation, payback and the break-even quantity.
SKU 2.2 · Replacement and risk
Replacement, retention and decisions under risk
Equivalent annual cost for replacement, defender–challenger comparison, expected value and sensitivity for decisions under uncertainty.