CSE/EE-301
Introduction
General Overview
Back Ground.
Intro & Importance.
Students attitude.
Attendance policy
Tests policy
Sessional marks policy.
Course Outline
Textbook: Engineering Economy
Sixtth Edition
By Leland Blank
Anthony Tarquin
Reference Book:
Engg Economy by E. Paul DeGarmo
Chapters (tentative)
Foundation of Engineering Economy
Factors: How Time and Interest Affect Money
Present Worth Analysis
Annual Worth Analysis
Rate of Return Analysis: Single Alternative
Rate of Return Analysis: Multiple Alternatives
Breakeven Analysis
Effect of Inflation
Depreciation Methods
After-Tax Economic Analysis
Engineering
It is a profession in which a
knowledge of the mathematical
and natural sciences gained by
study, experience, and practice is
applied with judgment to develop
ways to utilize, economically, the
materials and forces of nature for
the benefit of mankind
Engineering Economy Definition
Engineering economy involves formulating, estimating
and evaluating the economic outcomes when
alternatives to accomplish a defined purpose are
available.
Engineering economy is a collection of mathematical
techniques that simplify economic comparison.
A discipline that involves the systematic evaluation of
the cost and benefit of proposed technical projects.
Importance
For Engineering Activities
For Individuals
Principles of Engineering Economy
Develop the Alternatives
Focus on the Differences
Use a consistent viewpoint
Use a common unit of measurement
Consider all relevant criteria
Make uncertainty explicit
Revisit your decisions
Role of Engineering Economy in
Decision Making
Techniques and Models of engineering economy
assists people in making decisions
The time frame of engineering economy is primarily
the future
Estimates involves the three essential element
Cash Flows
Time of occurrence
Interest rates
The actual value may differ from the estimated
value
Role of Engineering Economy
(Contd…)
Sensitivity Analysis is performed during the
engineering economic study.
Sensitivity analysis is concerned with the
determination of the changes in decisions
on the basis of varying estimates.
Formulae for use in problem: Interest = amount owed now – original amount