Reflect on the assigned readings for the week. Respond to the following prompts: “What do I feel are the most important aspects of my learning in the chapters this week?” and “What about this learning was really worthy of my time and understanding?” Then explain how important it is in society or business.
Also, provide a graduate-level response to each of the following questions:
- American businesses have often been criticized for short-term thinking that places too much emphasis on payback period and ROR. When Honda started making cars in the early 1970s, for example, the chief executive officer stated that the firm would be “willing to accept an ROR no greater than 2% or 3% for as long as it took to be recognized as the best car maker in the world.” In light of the success of many Japanese firms, is the criticism of American business justified?
- Most countries have a progressive income tax system whereby each dollar earned in incrementally higher tax brackets is taxed at an increasingly higher rate. Do you think that a flat tax system would be more fair? How about a proportional tax system? Explain your answer.
Project Management: Processes, Methodologies, and Economics
Third Edition
Chapter 3
Engineering Economic Analysis
Copyright © 2017, 2005, 1994 Pearson Education, Inc. All Rights Reserved
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Figure 3-1 Standard Cash Flow Diagram Indicating Points in Time for P, F, A, and G
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Figure 3-3 Cash Flow Diagram for Example 3-2 Showing Deferred Uniform and Gradient Series
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Figure 3-4 Cash Flow Diagram for Example 3-3
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Figure 3-5 Relationship Between N P V and I R R for Example 3-12
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Figure 3-6 N P V Plot for More than One Change in Sign
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Figure 3-7 Relationship between N P V and I R R for Independent Investment
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Figure 3-8 Breakeven Chart Diagram for Example 3-16
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Figure 3-9 Breakeven Chart Diagram for Example 3-17
Copyright © 2017, 2005, 1994 Pearson Education, Inc. All Rights Reserved
Figure 3-10 Diagram for Utility Assessment
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Table 3-1 Assessed Utilities for Project Manager
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Figure 3-11 Utility Function Obtained from Data in Table 3-1
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Table 3-2 Payoff Matrix for New Product Development Example
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Table 3-3 Utility Matrix for New Product Development Example
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Figure 3-12 Three General Types of Utility Functions
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Figure 3-13 Arrangement of Rotary Combustor
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Figure 3-14 Details of Rotary Combustor
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Figure 3-15 Preference Curve for Risk-Averse Decision Maker
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Copyright
Copyright © 2017, 2005, 1994 Pearson Education, Inc. All Rights Reserved
19
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.1 Standard cash flow diagram indicating points in time for P, F, A, and G.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.2 Cash flow diagram for Example 3-1.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.3 Cash flow diagram for Example 3-2 showing deferred uniform and gradient series.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.4 Cash flow diagram for Example 3-3.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.5 Relationship between NPV and IRR for Example 3-12.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.6 NPV plot for more than one change in sign.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.7 Relationship between NPV and IRR for independent investment.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.8 Breakeven chart diagram for Example 3-16.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.9 Breakeven chart diagram for Example 3-17.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.10 Diagram for utility assessment.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Table 3.1 Assessed Utilities for Project Manager
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.11 Utility function obtained from data in Table 3.1.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Table 3.2 Payoff Matrix for New Product Development Example
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Table 3.3 Utility Matrix for New Product Development Example
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.12 Three general types of utility functions.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.13 Arrangement of rotary combustor.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.14 Details of rotary combustor.
Copyright © 2017, 2005, and 1994
by Pearson Education, Inc.
All Rights Reserved
Project Management: Processes, Methodologies, and Economics, 3e
Avraham Shtub, Moshe Rosenwein
Figure 3.15 Preference curve for risk-averse decision maker.