GE403 Engineering Economy

In this course we will discuss the Systematic Economic Analysis Technique. For it, we will learn Cost concepts, Time value of money operations, Measuring the worth of investments, Comparison of alternaives, Depreciation, Economic analysis of public projects one by one.

Students completing this course successfully will be able to

1. Recognize the time value of money and its operations.
2. Compare projects alternatives by different techniques.
3. Measure and determine depreciation and replacement.
4. Compare the economics of different projects in public and regulator sectors.
5. Recognize the cost concepts and the cost terminology.

Topics to be covered;

1. Introduction to Engineering Economic Analysis: Principles of Engineering Economic Analysis, Economic Analysis Techniques. 
2. Time Value Of Money: Cash Flow Diagrams, Simple Interest Calculations, Compound  Interest Calculations, Multiple Compounding Periods in a year and Continuous Compound  Interest Calculations.
3. Equivalence and Indifference
4. Comparison of Alternatives:, Choosing Planning Horizons
5. Present Worth Analysis: Single Alternative, Multiple Alternatives, One shot investment
6. Payback Period: Single Alternative, Multiple Alternatives
7. Capitalized Worth: Single Alternative, Multiple Alternatives
8. Future Worth Analysis: Single Alternative, Multiple Alternatives, One shot investment
9. Annual Worth Analysis: Single Alternative, Multiple Alternatives, Least Common Multiple of Lives Assumption
10. Capital Recovery Cost
11. Internal Rate of Return: Single Alternative, Multiple Alternatives
12. External Rate of Return: Single Alternative, Multiple Alternatives
13. Analyzing Alternatives With no Positive Cash Flow
14. Depreciation.
15. Replacement Analysis
16. Economic Analysis of Public Projects
17. Cost Terminology: Life Cycle Viewpoint, Past/Future Viewpoint, Manufacturing Cost Structure  Viewpoint , Fixed/Variable  Viewpoint and Average/Marginal Viewpoint