COURSE OBJECTIVES

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

COURSE LEARNING OUTCOMES (CLO)

CLO: 1. to explain the importance of Engineering Economics for Civil Engineers and to perform economic analysis of different Civil Engineering projects. (C3)
CLO: 2. to value economic analysis of different Civil Engineering projects. (C4)
CLO: 3. to discuss and interpret Civil Engineering related demand and supply in the context of Economics. (A2)
CLO: 4. to perform economic analysis in MS Excel for different Civil Engineering projects. (A2)

COURSE CONTENTS

  1. 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
  2. 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
  3. 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.
  4. Linear Programming
    • Mathematical statement of linear programming problems
    • Graphic solution simplex procedure,
    • Duality problem
  5. 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
  6. 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