Engineering economy lorie m. Cabanayan francisco d. Cuaresma

 
Investment cost 
– first cost or cost incurred during the acquisition phase. It is the capital required 
for most of the activities in the acquisition phase. 
Capital investment 
– series of expenditures over an extended period on a large construction 
project.
Working capital 
– refers to the funds required for current assets (equipment, facilities) that are 
needed for the start-up and support of operational activities.
Operation and maintenance cost 
– includes many of the recurring annual expense items 
associated with the operation phase of the life cycle. The direct and indirect costs of operation in 
five primary resource areas, 1) people 2) machines 3) materials 4) energy 5) information 
– are 
major parts of the costs in this category. 

---

10 
Disposal cost 
– includes those non recurring costs of shutting down the operation and the retirement 
and disposal of assets at the end of the life cycle. Ex. Costs associated with personnel, materials. 
SOME ECONOMIC RELATIONSHIPS 
 
Consumer and Producer Goods and Services 
 Consumer goods and services are those products or services that are directly used by people to 
satisfy their wants. (Food, clothing, homes, cars, appliances, medical services, etc) 
 Producer goods and services are used to produce consumer goods and services or other producer 
goods. (Machine tools, factory buildings, buses, etc.).  
 
Producer goods and services are intermediate step or serve as a mean to satisfy human wants. 
The amount of producer goods needed is determined indirectly by the amount of consumer 
goods or services that are demanded by people.