ELI5: Engineering economics

Imagine you're building the bestest, coolest treehouse ever! But you only have a certain amount of money from your parents. That's where engineering economics comes in for real engineers building bridges, cars, or even computer games.

It's all about making smart choices about money when you're building something.

• What is it? It's using math and smart thinking to figure out the best way to spend money on a project.

• Why do we need it? Because money is like a limited amount of candy. You want to get the most fun (the best project) for your candy (your money).

Let's say you're building a small robot. You need a motor.

• You can buy a cheap motor that doesn't last very long.
• Or you can buy a expensive motor that will last for a long time.

Engineers use things like:

• Cost-Benefit Analysis: Figuring out if the good things about a project are worth the cost. Like, is a super-fast train really worth the cost of building the tracks?
• Present Value: Money today is worth more than money tomorrow. Would you rather have \$1 now or \$1 in a year? Today, right!
• Rate of Return: How much money will you make from your project?