Daily Dose 025 | Engineering Economics
How do you find the Present Worth?
What’s the importance of knowing how to find the Present Worth?
It’s a legitimate question.
As engineers, we are making contributions to the economy on the daily.
Whether we realize it or not.
From direct contribution of economic output for the companies we work for to the return from the economy of improvements in physical infrastructure, in which we play a role in.
You see, every dollar that goes out the door needs to produce some economical advantage to the company that is producing it.
If not, then it’s only a matter of time before that company, and you, are out of business.
We at Prepineer are going to make sure you are ready for these Present Worth problems.
In this video, we dive in to a FE Exam Practice Problem in the subject of ENGINEERING ECONOMICS, specifically dealing with how to define the PRESENT WORTH of a potential investment.
Key Definition
What is PRESENT WORTH?
PRESENT WORTH is an equivalence method of engineer economic analysis in which a project’s cash flows are discounted to a single present value.
We deemed with the responsibility to determine whether or not a project is acceptable on a economic basis, it is perhaps the most efficient analysis method we can use.
Other analysis methods used in ENGINEERING ECONOMICS are built on a solid understanding of PRESENT WORTH.
So how can you go about determining the Present Worth of a potential purchase?
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
Video Review
How to define a Partial Derivative
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