Instructors Manual

FUNDAMENTALS OF
ENGINEERING
ECONOMICS, Second Edition


Chan S. Park
Auburn University
Instructor Solutions Manual to accompany Fundamentals of Engineering Economics, Second Edition, by Chan S. Park.
ISBN-13: 9780132209618. 2008 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.
This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage
in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.
Contents


PREFACE

Chapter 1 Engineering Economic Decisions
Chapter 2 Time Value of Money
Chapter 3 Understanding Money Management
Chapter 4 Equivalence Calculations under Inflation
Chapter 5 Present-Worth Analysis
Chapter 6 Annual Equivalence Analysis
Chapter 7 Rate-of-Return Analysis
Chapter 8 Accounting for Depreciation and Income Taxes
Chapter 9 Project Cash Flow Analysis
Chapter 10 Handling Project Uncertainty
Chapter 11 Replacement Decisions
Chapter 12 Benefit-Cost Analysis
Chapter 13 Understanding Financial Statements

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Instructor Solutions Manual to accompany Fundamentals of Engineering Economics, Second Edition, by Chan S. Park.
ISBN-13: 9780132209618. 2008 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.
This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage
in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.
Preface

Thi s I nst r uct or ' s Manual t o Fundamentals of Engineering Economics, 2
nd

edition cont ai ns det ai l ed sol ut i ons t o al l t he end- of - chapt er pr obl ems
( except some open- ended case pr obl ems) . The pr obl emsol ut i ons f ol l ow
t opi cal headi ngs l i st ed i n t he mai n t ext t o i ndi cat e t he gener i c
cont ent of each pr obl em. The headi ngs ar e pr ovi ded t o ai d you i n
sel ect i ng your pr ef er r ed mi x of pr obl emt ypes f or homewor k assi gnment s.

Companion Book Website

Two i mpor t ant r esour ces ar e avai l abl e f r omt he book s compani on websi t e
under I nst r uct or Recour se Cent er at ht t p: / / www. pr enhal l . com/ par k.

I nst r uct or Manual Each end- of - chapt er pr obl ems can be
downl oaded f r omt hi s websi t e. Each chapt er sol ut i ons come i n t wo
f i l e f or mat s: one i n Mi cr osof t WORD f i l e f or mat and t he ot her i n
PDF f or mat . I n cr eat i ng many mat hemat i cal equat i ons t he WORD
f i l es, I used t he Mat hTypeEquat i on Edi t or ( ver si on 6. 0) f r om
Desi gn Sci ence. I f you have not i nst al l ed t hi s Mat hTypeon your
PC, some of t he char act er s may not be di spl aced cor r ect l y. I f
t hat i s t he case, j ust open t he PDF ver si on t he f i l e.

A compr ehensi ve set of l ect ur e not es i n Power Poi nt f or mat i s al so
avai l abl e t o i nst r uct or s who adopt t he t ext .


Solutions Provided in Excel Worksheet


Fundamentals of Engineering Economics cont ai ns near l y 493
pr obl ems i ncl udi ng 41 shor t - case assi gnment pr obl ems. Many of
t hemcome wi t h mul t i pl e- par t quest i ons, br i ngi ng t he t ot al number
of quest i ons t o near l y 900.
The pr obl ems l i st ed under ``Shor t Case St udi es wi t h Excel "
r equi r e mor e i nvol ved assumpt i ons, sol ut i on st eps, and
cal cul at i ons.

Many of t he Excel wor ksheet s i n WORD f i l es appear as Mi cr osof t
Excel Wor ksheet Obj ect , so j ust pl ace t he cur sor over t he
wor ksheet ar ea and doubl e- cl i ck wi l l conver t t hemi nt o l i ve Excel
wor ksheet . Thi s wi l l al l ow you t o modi f y t he sol ut i on and answer
many what - i f quest i ons.

Some Deviations in Answers

Your i ndependent sol ut i ons t o t he t ext pr obl ems may yi el d answer s
sl i ght l y di f f er ent f r ommi ne due t o r oundi ng di f f er ences. I n some
cases, t he i nt er pr et at i ons and assumpt i ons st udent s br i ng t o t he
pr obl ems may di f f er f r ommy own i n cr eat i ng t hem, agai n r esul t i ng
i n di f f er ent answer s.
Some of t he answer s ( not t he pr ocedur es) t o t he end- of - chapt er
pr obl ems ar e post ed i n t he book' s compani on websi t e, so t hat
st udent s can check t he answer s on t hei r own.
iii
Instructor Solutions Manual to accompany Fundamentals of Engineering Economics, Second Edition, by Chan S. Park.
ISBN-13: 9780132209618. 2008 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.
This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage
in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

Havi ng made t hese di scl ai mer s, I wi sh t o emphasi ze t hat i t i s my and
t he publ i sher ' s i nt ent i on t o pr ovi de t he most accur at e sol ut i ons
possi bl e. Thus, i f you di scover any t ypo er r or s, or di sagr ee st r ongl y
wi t h t he i nt er pr et at i on and assumpt i ons r equi r ed of a par t i cul ar
sol ut i on, pl ease do not hesi t at e t o r epor t your concer ns t o me vi a
emai l at par k@eng. aubur n. edu so t hey may be cor r ect ed i n subsequent
pr i nt i ngs on t i me. I wi l l al so pl an on post i ng any er r or s on t he book' s
web si t e under " I nst r uct or Resour ce Cent er . "



Chan S. Park

Auburn
December 2007


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Instructor Solutions Manual to accompany Fundamentals of Engineering Economics, Second Edition, by Chan S. Park.
ISBN-13: 9780132209618. 2008 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.
This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage
in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.