Engineering Economics — Cheat Sheet
Time value of money, annuities, present worth, depreciation, NPV/IRR and payback.
Time value of money
| Future worth | F = P(1 + i)ⁿ |
| Present worth | P = F / (1 + i)ⁿ |
| i | interest rate per period; n periods |
Annuities (uniform A)
| Capital recovery | A = P·[i(1+i)ⁿ / ((1+i)ⁿ − 1)] |
| Sinking fund | A = F·[i / ((1+i)ⁿ − 1)] |
| Series present worth | P = A·[((1+i)ⁿ − 1) / (i(1+i)ⁿ)] |
Decision metrics
| NPV | Σ cashflow_t / (1+i)ᵗ − cost |
| IRR | the i that makes NPV = 0 |
| Payback | cost / annual savings |
| Benefit/cost | PW(benefits) / PW(costs) |
Depreciation & rates
| Straight-line | (C − S) / n per year |
| Book value | C − Σ depreciation |
| Effective rate | (1 + i/m)^m − 1 |
| Breakeven | fixed / (price − variable) |
Formula reference — verify against the governing standard. Not a substitute for engineering judgment.