Engineering Economics
Choosing between engineering alternatives with the time value of money: cash flow diagrams, interest and equivalence factors, present and annual worth, rate of return and incremental analysis, benefit-cost analysis of public projects, depreciation and taxes, inflation, replacement and economic life, and risk and decision analysis.
ENGG-401 Year 4 3 credits 12 lessons · 5 h 28 min
Offered by HSM University · Engineering Core
This is the American version of this course. See the Canadian version.
What you'll learn
- Explain the role of engineering economics in decision-making and represent alternatives with cash flow diagrams
- Apply simple, compound, nominal, effective and continuous interest to the time value of money
- Use uniform series, arithmetic gradient and geometric gradient factors and their spreadsheet equivalents
- Evaluate and compare alternatives using present worth, future worth, capitalized cost and payback
- Evaluate alternatives using annual worth, capital recovery, EUAC and levelized cost
- Calculate and interpret internal, modified and external rates of return, recognizing multiple roots
- Select among mutually exclusive alternatives with incremental analysis and allocate capital among independent projects
- Perform benefit-cost analysis of public projects using social discount rates and incremental B/C ratios
- Calculate tax depreciation and after-tax cash flows under Canadian CCA or US MACRS rules
- Account for inflation, differential price changes and exchange rates using consistent real or nominal analysis
- Determine economic service life and make replacement and retirement decisions
- Assess risk with sensitivity, break-even, scenario, decision tree and Monte Carlo methods, and prepare an economic study
Course content
12 lessons · 5 h 28 min total · final exam
- 1 Engineering economics and cash flow diagrams 25 min · quiz
- 2 Interest and the time value of money 28 min · quiz
- 3 Equivalence factors: uniform series and gradients 30 min · quiz
- 4 Present worth analysis 28 min · quiz
- 5 Annual worth analysis 30 min · quiz
- 6 Rate of return analysis 26 min · quiz
- 7 Incremental analysis and mutually exclusive alternatives 28 min · quiz
- 8 Benefit-cost analysis and public projects 27 min · quiz
- 9 Depreciation and income taxes 24 min · quiz
- 10 Inflation, price changes and real versus nominal analysis 26 min · quiz
- 11 Replacement analysis and economic service life 26 min · quiz
- 12 Risk, sensitivity and decision analysis, and capstone 30 min · quiz
- E Final exam 20 questions
Description
Choosing between engineering alternatives with the time value of money: cash flow diagrams, interest and equivalence factors, present and annual worth, rate of return and incremental analysis, benefit-cost analysis of public projects, depreciation and taxes, inflation, replacement and economic life, and risk and decision analysis.
Part of the Engineering stream, typically taken in year 4.