COURSE SYLLABUS

 

 

IE 424     Advanced  EngưneerIng EconomIc AnalysIs     (3-0) 3

 

URL: http://ie.atilim.edu.tr/~ie424

 

Catalog Data:

The theory and application of advanced engineering economy principles and methods for engineering and managerial decision-making. Concepts and techniques in economic analysis, MARR and cost of capital, capital structure, methods for comparing risky projects, valuation theory and decision tree analysis.

 

Textbook:

Canada, J. R.,  Sullivan, W. G.,  and White, J. A.,  Capital Investment Analysis for Engineering and Management, 2nd edition, Prentice Hall, 1996.

 

References:

·         Park, C. S., Sharp-Bette, G. P., Advanced Engineering Economy, John Willey and Sons, Inc., 1990.

·         Thuesen, G.J., and Fabrycky, W.J, Engineering Economy, 9th edition, Prentice Hall, 2001.

·         Ross, Westerfield and Jurdan, Fundamentals of Corporate Finance, 6th edition, McGraw-Hill Companies, 2003.

·         Bussey, L., and Eschenbach, T., Economic Analysis of Industrial Projects, 2nd edition,  Prentice-Hall, 1992.

·         Brealey, R. A., and Myres, S. C., Principles of Corporate Finance, 5th edition, McGraw-Hill Companies, Inc., 1996.

 

Prerequisites by Topic:

Elementary calculus; introductory probability; experience with spreadsheet  packages.

 

Method for Assessing Student Knowledge of Prerequisite Topics:

None.

 

Goals:

This course aims to introduce the economic dimension of evaluating and selecting alternative investment projects. Upon course completion, the student will have the capability to solve advanced engineering economy problems in the broadest context of engineering economic feasibility.

 

Objectives:

·         To give students an understanding of advanced engineering economy principles and methods necessary to evaluate and select engineering alternatives.

·         To help students understand the concept of MARR and the cost of capital. 

·         To help students develop necessary skills to evaluate capital investment alternatives using economic concepts.

·         To help students use capital project evaluation techniques including risk and uncertainty in capital investment analysis.

·         To give students the concept of present value to price common stocks and bonds and the idea to understand the importance of pricing investments.

 

 

 

Topics:

 1.  Basic concepts and techniques in economic analysis (2 weeks)

 2.  Selecting a minimum attractive rate of return (4 weeks)

 3.  Methods for comparing risky and uncertain projects (4 weeks)

 4.  Valuation theory (2 weeks) 

 5.  Decision tree analysis (2 weeks)

 

Computer Usage:

·         To use spreadsheets to prepare homework assignments.

·         To access to obtain homework assignments and solutions on the web.

 

Laboratory Projects:

None.

 

Contribution to Professional Component:

1.        Mathematics and Basic Science                 0 credits

2.       Engineering Science or Design                   3 credits

3.       General Education                                     0 credits