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The criterion for choosing an alternative in engineering economics for a specific set of estimates is called a measure of value. The measures developed and used in this book are as follows: Present Value (PV)

All of these measurements of value take into account that money produces money over time. This is the concept of the time value of money.

It is a well known fact that money makes money. The time value of money explains the change in the amount of money over time of funds that are owned (invested) or owed (loaned). It is the most important concept in engineering economics.

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