Daily Dose 013 | Engineering Economics
How do you find the Rate of Return on an engineering investment?
Where is your mindset when you think about ENGINEERING ECONOMICS?
For most engineers, they’d rather stick to the physical realm of our industry – and I don’t blame them.
But in order to be the most well rounded asset to those we provide services to, we must be dangerous in all aspects of engineering research and design – and that includes ENGINEERING ECONOMICS.
In this video, we will dive in a practice problem in the subject of ENGINEERING ECONOMICS, specifically, working on determining the RATE OF RETURN on a defined engineering investment made by a company.
What is RATE OF RETURN?
The RATE OF RETURN is a profit on an investment over a period of time, expressed as a proportion of the original investment.
The time period can be anything, but is typically a year, in which case is referred to as the annual return.
It takes in to account any change in value of the investment as well cash flows which the investor receives from the investment, such as interest payments or dividends.
As engineers, we may see it measured in dollars or as a percentage of the original amount invested.
A loss instead of a profit is described as a negative return.
Check out the video and see how we can go about solving this type of problem in the most efficient manner.
As always, with Love, Prepineer
How to find the engineering Rate of Return
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