Engineering Economy

CHAPTER 10

Economy Study With Inflation Considered

10.1 INTRODUCTION

Inflation is observed nearly every day in personal and professional life. The government units, business, and industrial corporations closely watch and analyse the impact of inflation rate. When inflation is considered, an engineering economy study yields different results compared to one in which it is not considered. In the last few years, inflation has been a major concern in India and in most industrialized nations. Inflation rate is sensitive to real as well as perceived factors of the economy. Factors such as the cost of energy, interest rates, availability and cost of skilled people, scarcity of materials, political instability, and money supply have significant short-term ...