EIT Industrial Review, Second Edition
This toolbook provides a complete review for the Industrial section of the Engineer in Training State licensing exam. It reviews each topic with numerous example problems and complete step-by-step solutions.
TABLE OF CONTENTS EIT Industrial Review, Second Edition
Chapter 1: Economy
Greater knowledge of engineering economics and cost analysis is expected of industrial engineers than of others. In the 60-question afternoon session of the FE Exam, expect three questions on engineering economics and three on industrial cost analysis; other questions may incidentally involve these topics.
Engineering Economics
The Engineering Economics section of the FE Discipline Specific Reference Handbook (pages 75 81) gives nomenclature and definitions, compound interest formulas and tables, depreciation schedules, and brief discussions of rate of return, breakeven analysis, inflation, and benefit-cost analysis. We will clarify those materials and review essential concepts not covered in the Handbook.
Compound Interest
The symbol A, identified in the Handbook as "uniform amount per interest period," is the familiar quantity better known as the equal-payment-series amount. A loan of P dollars can be repaid in n end-of-period instalments of A dollars each. Revenues of A dollars per year for n years have present worth P dollars, or, at time n, future worth (also called compound amount) F dollars. It is customary to use the end-of-year convention; cash flows (inflows or receipts positive, outflows or disbursements negative) that flow within a year are considered to flow at the end of the year. Two compound interest formulas, although listed in the Handbook, should be memorized:
F = P(1 + i) n or P = F ?", where ? = 1 /(1 + i)
and
P = A(1...
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