Principles of Engineering Economic Analysis, Sixth Edition

Engineering Decisions, Put on a Sound Economic Footing

Principles of Engineering Economic Analysis has served as a foundational text for engineering economy courses for decades, and the sixth edition continues that work with a practical emphasis: technical projects must stand up economically, not just technically. The book is written for readers who need to compare alternatives, justify investments, and explain their reasoning clearly to managers, clients, and other decision-makers.

What the Sixth Edition Covers

The text builds from core concepts to applied decision methods. Early chapters establish the time value of money and the principles of engineering economic analysis. Later chapters develop present worth, future worth, annual worth, and rate-of-return analysis, then move into depreciation, after-tax cash flow, replacement decisions, inflation effects, supplementary analysis, public-sector evaluation, capital budgeting, and cash-flow estimation.

A Structured Way to Analyze Alternatives

A recurring framework—the Systematic Economic Analysis Technique, or SEAT—helps readers organize assumptions, compare alternatives, and present conclusions systematically. This structure is one of the book’s strengths: it turns economic analysis into a repeatable process rather than a collection of isolated formulas. The edition also reflects the role of spreadsheet tools such as Excel in modern engineering economy practice.

Practice and Course Support

End-of-chapter FE-like problems and problem sets give readers opportunities to test their understanding and apply techniques to realistic scenarios. The sixth edition updates tax information and company/industry examples, helping the material stay connected to current practice. Instructors will find a broad sequence of topics suitable for a full course, while independent learners can work through the chapters in order or focus on specific methods.

Who This Book Is For

Undergraduate and graduate engineering students will find a rigorous introduction to engineering economy. Practicing engineers, project managers, analysts, and technical professionals can use it as a reference for capital investment decisions, cost comparisons, depreciation, taxes, and long-range planning. The book assumes a serious interest in quantitative decision-making and a willingness to work through calculations and case-based reasoning.

Why It Still Matters

Engineering work is often judged by whether it makes economic sense. This edition keeps that reality at the center, offering methods for evaluating projects not only by initial cost but by lifetime cash flow, risk, taxes, and alternative uses of capital. For anyone who needs to build a defensible economic case for an engineering project, this sixth edition remains a substantial and practical guide.