Engineering economics assumes estimates (interest rates, project life, demand, costs). Reality is unpredictable. You must identify key variables and test how changes affect the outcome (sensitivity analysis, break-even analysis, or probabilistic modeling).
While money is the primary unit, it isn't the only factor. Selecting an alternative requires balancing the numerical results (Profit, ROI) with qualitative factors like environmental impact, brand reputation, or employee morale. 7 principles of engineering economics with examples