Engineering Economics (MTCE1111)

Pre-requisite(s)

None

Recommended Book(s)

Engineering Economy,  Leland Blank  and Anthony Tarquin, Latest Edition 

Reference Book(s)

Engineering Economy, WG Sullivan, EM Wicks And CP Koelling, 14th Edition

Course Objectives

1. To introduce the fundamentals of engineering economics. 2. To enable students to perform economic analysis of different projects.

Course Learning Outcomes (CLO)

CLO:1            Understand importance of engineering economics.

CLO:2            Will be able to perform economic analysis of different projects.

Course Contents

Fundamentals of Engineering Economics

  • Basic concepts and principles of Economics

  • Micro-economics theory

  • The problems of financial scarcity

  • Basic concept of Engineering Economy

  • Consumer and Producer goods, Goods and services

  • Price-supply-demand-relationship

  • Equilibrium, Elasticity of demand & supply

  • Measures of economic worth, Non-monitory values

  • Theory of pricing

  • Theory of production

  • Laws of return

Capital Financing and Allocation

  • Funding, funding agencies and planning commission

  • Capital Budgeting, allocation of capital among independent projects

  • Financing with debt capital

  • Financing with equity capital

  • Trading on equity

  • Financial leveraging

Business Organization and Industrial Relationship

  • Types of ownership

  • Types of stocks, partnership and joint companies

  • Banking and Specialized credit institution

  • Labour problems, labour organization, prevention and settlement of disputes, Markets, competition and monopoly

Linear Programming

  • Mathematical statement of linear programming problems

  • Graphic solution simplex procedure

  • Duality problem

Depreciation and Taxes

  • Depreciation concept

  • Economic life

  • Methods of depreciation

  • Profit and returns on capital, productivity of capital

  • Gain (loss) on the disposal of an asset

  • Depreciation as a tax shield

Selection between Alternatives

  • Time value of money and financial rate of return, present value, future value and annuities

  • Rate of Return Analysis

  • Incremental analysis

  • Cost-benefit analysis

  • Payback period

  • Sensitivity and breakeven analysis

  • Alternatives having different lives, making of buy decisions and replacement decisions

Mapping of CLOs to Program Learning Outcomes

CLO’s

CLO-1

(Understanding of Engineering Economics)

CLO-2

(Perform Economic Analysis)

PLO’s

PLO-1

(Engineering Knowledge)

 

 

PLO-2

(Problem Analysis)

 

 

PLO-3

(Design/Development of Solutions)

PLO-4

(Investigation)

 

 

PLO-5

(Modern Tool Usage)

 

 

PLO-6

(The Engineer and Society)

 

 

PLO-7

(Environment and Sustainability)

 

 

PLO-8

(Ethics)

 

 

PLO-9

(Individual and Team work)

 

 

PLO-10

(Communication)

 

 

PLO-11

(Project Management)

 

 

PLO-12

(Lifelong Learning)

 

 

Mapping of CLOs to Assessment Modules

CLOs

CLO:1

CLO:2

Assessment Modules

Assignments (20-25%)

Quizzes (15-20%)

Midterm Exam (20%)

Final Exam (40-45%)