Fundamentals of Engineering economics - FE Civil Exam

Analyze cash flow by accounting for initial costs, maintenance, income, and salvage value, and visualize with a timeline to compute the overall profit.

Explore the time value of money, comparing present and future value, using discount factors to convert between p, f, a, and g with interest rate i and years n.

Evaluate a retirement fund growth: a 40-year-old doctor invests 30,000 at 6% annual compounding for 20 years to reach about 96,000 using the formula f = p(1+i)^n.

Apply the present-worth calculation from engineering economics: convert a future $3,000 eight years from now at 5% interest using P = F(1+i)^-n, yielding about $2,030.

Apply the future value of an ordinary annuity to a $20,000 annual deposit at 6% for 10 years, yielding most nearly $260,000.

Use the future value of an annuity formula to compute the annual deposit from a $1,600 balance at 7% over six years, yielding about $223 (closest to $220).

This solved example uses a $1,000 starting maintenance cost, $500 annual increases, and 6% interest to compute the ten-year gradient's equivalent annual maintenance cost, about $3,000.

explore how non-annual compounding affects growth by comparing annual, semiannual, quarterly, and monthly frequencies. use the effective rate formula (1+i/m)^m−1 to see quarterly compounding yields about 5.1%.

Compute the annual loan payment for a $100,000 present value borrowed at 12% over five years using the annuity formula, yielding about $27,740 and the closest option of $28,000.

Compute the future value of a $100 monthly deposit over 24 months at 12 percent annual interest, compounded monthly, yielding about $2,697 (closest to $2,700).

Calculate the present value needed to accumulate $10,000 in five years at 6% interest using the present value formula, yielding about $7,473 (closest answer $7,500).

Compute the present worth of a used car by combining $500 today with $250 monthly for 24 months at 1% per month, which totals about $5,811.

Solve a loan problem to find the nominal annual interest rate for a $100,000 loan with monthly payments of $2,225 over five years, yielding 12%.

Calculate the nominal rate from a 12% effective annual rate with quarterly compounding, yielding 11.5%.

Learn economical analysis to compare projects using cash flow and time value, covering methods: present worth analysis, annual cost analysis, benefit cost analysis, rate of return analysis, and break-even analysis.

Learn present worth analysis by converting cash flows to present value at an interest rate, compare options, and select the project with the highest net present worth.

Explore annual cost analysis (euac) as an alternative to present worth by computing the estimated uniform annual cost from initial, maintenance, and operating costs, with salvage negative.

Learn how benefit cost analysis compares project benefits and costs to assess economic feasibility, using a water network example with a benefit-cost ratio around 2.2.

Master rate of return analysis to determine the minimum acceptable interest rate for profitability. Learn to compare present worth and future worth for bonds and investments, with practical examples.

break-even analysis determines the minimum production rate to make an investment feasible, comparing rent versus buy and using present-worth concepts to compare expenses and benefits.

This practice problem shows selecting the most cost-effective equipment over eight years at 12 percent by calculating present worth for A, B, and C; C is best, E second.

Compute the equivalent uniform annual cost of a truck by converting its present cost, salvage value, and maintenance into a single annual cost at 10% interest, yielding about 1,406 dollars.

Calculate the benefit-cost ratio by dividing the annual benefits by total costs, yielding about 1.18. Proceed with the project because the benefit-cost ratio exceeds one.

Calculate the rate of return needed to grow $10,000 today to $20,000 in 12 years, solving the present value to future value relation and finding approximately 6%.

Compare lease costs (upfront $1,500 and $0.20 per mile) versus a personal car at $0.27 per mile, using 6% over three years to find break-even miles.

Compare upfront costs of 15000 vs 1000 and per-unit costs of 0.5 vs 1.5 for 5000 units; the break-even point is year three.

learn to assess uncertainty and risk in investment choices by building an uncertainty flowchart, estimating market probabilities, calculating expected values, and identifying the economically superior project.

Learn how depreciation reduces a product's value and yields book value from initial and salvage values. Compare straight-line and accelerated depreciation methods, with emphasis on annual and accumulated depreciation.

Determine the capitalized cost by adding the initial construction cost to the maintenance capitalized cost, which equals annual maintenance fees divided by the interest rate, illustrated with a stadium example.

Explore how taxable income equals revenue minus expenses minus depreciation under taxation rules, using straight-line depreciation and a 35% tax rate to find after tax net income.

Learn how inflation erodes purchasing power and how to compute the modified rate D = I + f + I f. Apply future value and present value concepts for bonds.

Compare expanding versus not expanding using expected monetary value from profits and probabilities. Choose not expanding as the more economical option, given 1.4 million cost and 2 million expected value.

Compute straight-line depreciation for a $2,300 asset with $350 salvage over 12 years, yielding $162.5 per year and about $812.5 after five years, with $800 as the closest option.

Compare straight-line and mac depreciation for a $250,000 machine with a $40,000 salvage value over five years; after three years, straight-line leaves a higher book value than mac.

calculate the capitalized cost today to fund an annual scholarship payment of $10,000 at 8% interest, resulting in $125,000.

Finish the course with a quick refresher example before the FE civil exam. Visit the instructor profile for topics and join the private Facebook group for clarifications and questions.