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Engineering Economy

Profitability and Economic Choice
Consultants, Software and Training

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California CoastlineAcleris provides knowledge, tools and services to private and public sector managers and investors, to reduce financial risk for capital-intensive projects through rigorous forecasting and control of cash-flows and the other factors impacting a project's viability and profitability. Long-range financial planning takes the surprise out of cash flows, ensuring that revenues, expenses and capital are well understood, are realistic and planned for.

During the heady days of the '90's, the dot-com era, money flowed freely from investors to organizations, often based on little more than someone's hunch, outlined on the back of a napkin. Nowadays in contrast, sage investors, managers and responsible custodians of the public purse require that all the economic aspects of an entire project be presented in meticulous detail, complete with all the correct assumptions, variabilities and statistical items. In addition, governments require some regulated industries to include an engineering economic analysis as part of tariff filings, for example.

The focus of our discipline is known as Engineering Economics or Engineering Economy, depending upon one's perspective and training. The bottom line is that an engineering economics analysis of a capital-intensive project provides a powerful decision making tool, providing a varied choice of economic evaluators as may be most suitable for the project and the organization involved. In addition, these flexible techniques permit valid comparisons of lease vs. buy alternatives, benefits vs. cost (most benefit for the lowest cost), determination of minimum revenue requirements, estimating project profitability and many other similar metrics.

Acleris uses the time value of money, together with concepts like depreciation, taxes, interest, inflation, maintenance, survivor curves, replacement and sensitivity analysis to determine likely outcomes — sometimes also called economic life-cycle analysis.

Our glossary of terminology includes useful information about engineering economy concepts. At Acleris, we can help you make the right decisions for your projects.