Offering: Winter Quarter (every year)
Course Description (4 units):
Lecture—3 hours + 1-hour group discussion. Prerequisite: upper-division standing in Engineering. The analysis of problems in engineering economy; the selection of alternatives; replacement decisions. Compounding, tax, origins, and cost of capital, economic life, and risk and uncertainty are applied to methods of selecting most economic alternatives.
Textbook:
- Official: Fundamentals of Engineering Economics, 4th Edition. Chan S. Park. Pearson Education. USA, hardback edition. ISBN-13: 978-0-13-487007-6
Lecture Topics
- Introduction to Engineering Economics
- The Time Value of Money
- Equivalence of Cash Flows
- Interest Rates
- Inflation/Deflation
- Economic Comparison of Alternatives
- Invalid Analysis Methods
- Present Worth Analysis
- Calculating the MARR
- Annual Worth Analysis
- Rate of Return Analysis
- Benefit-Cost Analysis
- Corporate Income Taxes
- TaxesDepreciation
- After-tax Analysis
- Incorporating Inflation in Taxes
- Risk and Uncertainty
- Sensitivity Analysis
- Break-even & Scenario Analysis
- Probabilistic Cash Flow Analysis
- Expected Value
- Replacement Analysis