WHAT ARE THE BASIC CONCPETS OF ECONOMY?

 Engineering economy has become n inevitable reality of recent times. Every business needs economist to run them. These economists use such kind of basic concepts to to run economy. They include Capital, engineering economy, sensitivity analysis, measure of worth, time value of money, common morals, personal morals, engineering ethics, interests rates, interest period, rate of return, cash inflow, cash outflow and minimum attractive rate of return. One should know the basics of Basic definitions of project management too.

According to Anthony Tarquin in every engineering project, it is very important to know about the project in deep. Now the point lies in that engineering economy deals with estimates, and evaluating the expected economic outcomes of alternatives designed to accomplish a defined purpose. For this purpose economic firms can hire different experienced professionals who had already done such kind of projects in the past. They can evaluate the incoming projects too. Economy can most the time deals with money. In this case this money is called as capital. Sensitivity analysis is utilized to determine how a decision might change according to varying estimates. It is quite possible that in one survey teams tell that  specific project is good for a specific firm. However, in some other survey, they can also reject it. For this purpose sensitivity analysis terms is there. For this purpose the criteria used to select n alternative in engineering economy for a specific set of estimates is called as measure of worth. gin the expert teams which a firm can hire to select the project can specify such kind of criteria. They specially take care of the concept of time value of money. According to time value of money, money makes money. It is very important to know some of the ethics of engineering economy. There are some moral values too in this regard. Theses moral values are there for a specific person, for a group or for a society. Universal morals are fundamental moral beliefs held by virtually all the people. As an example, One must has to make money in business which can be a universal common values in this regard. Individual values are the beliefs that a person has a maintains over time. The example of it lies in sitting ay the side of the meeting in every sitting. Whereas some of the engineering ethics are also involved in it. Now professionals in specific discipline are guided in their decision making and performance of work activities by a formal standard or code. Interest rate can be defined as when interest paid over a specific time unit is expresses as a percentage of the principal the result is called interest rate. Whereas the time unit of the rate is called the interests period. Now companies need to know the rate of return in this regard too. It can be defined as interest earned over a specific period of time is expresses as  percentage of the original mount. This term is the most important one in this regard. There are some minor terms too. They include cash inflow which is defined as receipts, revenues, incomes and savings generated by business activity. The positive sign is there for cash inflow. Whereas cash outflow are the costs, disbursements, expenses and taxes caused by projects and business activity. Similarly, the minimum attractive rate of return is a reasonable rate of return established for the evaluation and selection of alternatives.

In a nutshell, It can be said that In engineering economy one can not ignore some of the basic jargons of it. Some of the important ones are there.