COURSE DESCRIPTION

Presents economic analysis of engineering alternatives. Studies economic and cost concepts, calculation of economic equivalence, comparison of alternatives, replacement economy, economic optimization in design and operation, depreciation, and after tax analysis. Lecture 2 hours per week.

GENERAL COURSE PURPOSE

This is an introductory course in the application of economic principles to engineering. It is intended for engineering transfer students, who will develop skills for economic analysis in engineering decision making.

ENTRY LEVEL COMPETENCIES

Competence in Algebra II from high school or such courses as MTH 115 and 116.

COURSE OBJECTIVES

To introduce the student to the economic boundary conditions inherent in engineering; provide him/her with the fundamental tools of economic decision making; expose her/him to cost models and equivalence in realizing engineering products; teach the student various methods of calculating interest and depreciation; teach the novitiate the methodology of investments, the impact of taxes and inflation; expose him/her to the economic ramifications of engineering project scheduling.

MAJOR TOPICS TO BE INCLUDED

1. Introduction to economic decision-making.
2. Cash flow and equivalence.
3. Interest formulas and applications using hand calculator and the PC.
4. Methods of analysis, including equivalent worth, interest rates, rates of return on investment, cost benefit.
5. Depreciation.
6. Income taxes and replacement.
7. Inflation effects.
8. Cost estimating sensitivity analysis.

1. Critical path economics.
2. Multiple economic models in decision making; case studies.