Engineering Economy
—
Profitability and Economic Choice
Consultants, Software and Training

Acleris

—

Glossary of
Business and
Economic
Choice

To use the glossary, simply click on the first letter of the term of interest below:

Economic Study: Unlike a comparative cost study, the economic study includes a revenue component.

F: In economic equations, F equals a Future lump sum of money.
_
F or F': In economic equations, a total amount of money that flows continuously and uniformly during a future period.

i: In economic equations, effective annual interest rate for discrete compounding.
Income Tax: Taxes payable on taxable income derived from various cash flows. See also Minimum Acceptable Revenue.
Income Tax Burden: The amount of income tax generated by a project under conditions of capital cash flow generated revenue equaling MAR. This results from studies where an assumed revenue generates income taxes based on an organization's minimum acceptable revenue (MAR).
Internal Rate of Return: The discount rate that results in an NPV equal to zero. Caution should be used as IROR calculations can result in multiple roots, giving more than one IROR value (only one of which is correct). Generally for a project to proceed, the IROR must be equal or exceed the organization's MARR in order to benefit the organization.
Internal Revenue Service (IRS): The US government body responsible for administering tax laws and collecting taxes.
IROR (IRR): Internal Rate of Return, which see.
IRS: Internal Revenue Service (US).