[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-657245-105":59,"doc-detail-657245-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","engineering-economics-introduction-time-value-of-money","Engineering Economics - Introduction - Time Value of Money","","Engineering economic analysis combines quantitative and qualitative techniques to compare engineering alternatives and select the preferred design. The cash flow approach treats individual transactions as occurring at specific points in time, where value depends on both amount and timing, forming the time value of money (TVOF). The text outlines four simple time-shifting rules, introduces discounted cash flow (DCF) and economic worth, and presents a step-by-step analysis procedure. It further explains discounted cash flow concepts using time-adjustment rules and cash flow diagrams (CFDs).",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":30,"@type":76,"position":81},"https://docshare.wps.com/document/technology/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/engineering-economics-introduction-time-value-of-money/657245/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/engineering-economics-introduction-time-value-of-money/657245.png","ImageObject",300,407,{"name":92,"@type":93},"OmBimo","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-30","2026-10-26",true,{"@type":102,"interactionType":103,"userInteractionCount":24},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What is engineering economic analysis and why is cash flow important?","Question",{"text":112,"@type":113},"Engineering economic analysis combines quantitative and qualitative techniques to compare economic differences among engineering alternatives. The cash flow approach models when money is received and paid so value can be evaluated over time.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"How do discounted cash flow (DCF) and economic worth relate to TVOF?",{"text":117,"@type":113},"DCF reduces individual transactions occurring at different times to a single time instant. The resulting sum, expressed using the time value of money, is called economic worth.",{"name":119,"@type":110,"acceptedAnswer":120},"What does the time value of money (TVOF) depend on in these rules?",{"text":121,"@type":113},"TVOF depends on both the amount of money and the point in time when it is received or paid. Money can only be added or subtracted when it occurs at the same time point.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},657245,1793073875,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":29,"category_name":30,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":24,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":139,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145},962090893581,"https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c","5. Engineering economics  \n1 . Introduction  \n2 . Time value of money  \n3 . Planning horizon and minimum attractive rate of return  \n4 . Present worth analysis  \n5 . Summary  \nText  \nWhite, Case, and Pratt, Principles of Engineering Economic Analysis, 5th ed., Wiley  \n5.1. Introduction  \nEngineering economic analysis is a combination of quantitative and qualitative techniques to analyze economic differences among engineering alternatives in selecting the preferred design. The cash flow approach is one of the major approaches in the engineering economic analysis. A cash flow occurs when money actually changes hands from one individual to another or from organization to another.  \n􀂾 The individual events (transaction) of the cash flow (money received and money spent or paid) are distributed in time.  \n􀂾 The value of a given sum of money depends on both the amount of money and the point in time when the money is received or paid.  \nAny quantitative measure of the value of a given sum of money on both the amount of money ant time of transaction can be called time value of money (TVOF ) .  \nExamples of TVOF: Interest rate, discount rate, hurdle rate, minimum attractive rate of return, cost of capital.  \nThe four simple rules allow one to reduce the transactions distributed in time to the same instant:  \n1 . Money has a time value.  \n2 . Money cannot be added of subtracted unless it occurs at the same point(s) in time  \n3 . To move money forward one time unit, multiply by one plus the discount or interest rate  \n4 . To move money backward one time unit, divide by on plus the discount or interest rate .  \n5.1. Introduction  \nThe procedure of application of these rules is known as discounted cash flow ( DCF ) .  \nThe DCF allows one to reduce all individual transaction to a single time instant. The overall sum of these transactions calculated in terms of the time value of money is called the economic worth. Different actual measures of the economic worth can be used depending on the problem.  \nRoughly, the economic analysis implies calculation of the economic worth for all investment alternatives and choosing the option (or design) that the largest economic worth. The systematic economic analysis technique implies solving the problem as a sequence of following steps  \n1 . Identify the investment alternatives [What investment alternatives are available?]  \n2 . Define the planning horizon [What is the length of time over which the decision is to be made?]  \n3 . Specify the discount rate [What TVOM will be used to move money forward or backward in time?]  \n4 . Estimate the cash flow [What are the best estimates of the cash flows for each of the alternatives?]  \n5 . Compare the alternatives by calculating the economic worth [Which criterion seems best, based on the economic criterion chosen?]  \n6 . Perform supplementary analysis [How sensitive is the economic preference to changes in or errors in the estimates used in the analysis?]  \n7 . Select the preferred investment.  \n5.1. Introduction  \nExamples of the cash flow diagrams for two investments alternatives (see example 2.1 on page 38):  \nThe alternative B is economically preferred.  \nWhy?  \nIn order to solve such problems we can use a principles of economic analysis, which are the experience‐based rules for maximizing the profit.  \n5.0. Introduction  \nSee the extended discussion of these principles in pages 6‐8.  \n5.2. Time value of money  \n􀂾 Cash flow diagrams  \n􀂾 Simple interest calculations  \n􀂾 Compound interest calculations  \n􀂾 Simple/multiple cash flows  \n􀂾 Example: Determining the present worth of a gradient series  \nReading assignment  \nWhite, Case, and Pratt, 2.1‐2.5  \n5.2. Time value of money  \nIn this section, we consider how to calculate the time value of money (TVOF) at different times. The technical approaches for such calculations are based on three simple rules:  \n1 . Money cannot be added of subtracted unless it occurs at the same point(s) in time  \n2 . To move money for","cbCaiv8xsDX298yA","https://ap.wps.com/l/cbCaiv8xsDX298yA","pdf",1582921,23,"English","# 1. Introduction\n## Engineering economic analysis and cash flow approach\n# 2. Time value of money\n## Time-shifting rules and discounted cash flow (DCF)\n## Cash flow diagrams (CFDs)\n## Simple interest and compound interest calculations","[{\"question\":\"What is engineering economic analysis and why is cash flow important?\",\"answer\":\"Engineering economic analysis combines quantitative and qualitative techniques to compare economic differences among engineering alternatives. The cash flow approach models when money is received and paid so value can be evaluated over time.\"},{\"question\":\"How do discounted cash flow (DCF) and economic worth relate to TVOF?\",\"answer\":\"DCF reduces individual transactions occurring at different times to a single time instant. The resulting sum, expressed using the time value of money, is called economic worth.\"},{\"question\":\"What does the time value of money (TVOF) depend on in these rules?\",\"answer\":\"TVOF depends on both the amount of money and the point in time when it is received or paid. Money can only be added or subtracted when it occurs at the same time point.\"}]","Engineering Economics - Introduction - Time Value of Money | PDF",1792976265,58]