Course Details
Course Information Package
Course Unit Title | ENGINEERING ECONOMY | ||||||||||
Course Unit Code | AMEM203 | ||||||||||
Course Unit Details | |||||||||||
Number of ECTS credits allocated | 5 | ||||||||||
Learning Outcomes of the course unit | By the end of the course, the students should be able to:
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Mode of Delivery | Face-to-face | ||||||||||
Prerequisites | AMAT111 | Co-requisites | NONE | ||||||||
Recommended optional program components | NONE | ||||||||||
Course Contents | Introduction to Engineering Economic Decisions: Evolution of large engineering projects: idea generation, design, safety, cost, market demand, and business risk. Types of Strategic Engineering Economic decisions: equipment and process selection, equipment replacement, new product introduction and existing product expansion, cost reduction, service improvement.
Understanding Financial Statements: The Balance Sheet and the Cash Flow Statement. Use Ratios to make business decisions (dept management, liquidity analysis, asset management, profitability analysis and market value analysis.
Time Value of Money: Interest, economic equivalence, Interest formulas for Single Cash Flows, equal payment cash flows, and gradient cash flows (lineal and geometric).
Evaluating Business and Engineering Assets: Present Worth Analysis. Annual Worth Analysis: Make or Buy decisions, Break-even point. Rate of return Analysis: Internal rate of return criterion.
Depreciation: Factors inherent to asset depreciation. Book depreciation methods
Project Cash Flow Analysis: Classification of Costs; Incremental Cash Flows; and Project Cash Flow Statements.
Handling Projects Uncertainty: Methods of describing Project Risk: sensitivity analysis, break-even analysis; Probability concepts, probability distributions; Decision trees diagrams.
Equipment replacement decisions: Replacement strategies for finite/ infinite planning horizons. | ||||||||||
Recommended and/or required reading: | |||||||||||
Textbooks |
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References |
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Planned learning activities and teaching methods | The taught part of course is delivered to the students by means of lectures, conducted with the help of computer presentations. Lecture notes and presentations are available through the web for students to use in combination with the textbooks.
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Assessment methods and criteria |
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Language of instruction | English | ||||||||||
Work placement(s) | NO |