An Improved Basic Methodology for Making Engineering Economic Comparisons of Alternative Facilities

A definition of engineering economics is formulated. This definition mandates that all the effects of all subsidies should be eliminated from all the factors involved in engineering economic comparisons of alternative facilities. It also requires that the effects of inflation on the economic costs of goods and services and on the cost of money also all be included in the evaluations. On-the-other-hand, it suggests that purely financial expenses, money costs, such as, for example, income taxes, not be included in such studies.