A course in engineering economics and the economic comparison of alternative technical systems. Includes interest, equivalence, depreciation, taxes, and risk. NOT FOR ENGINEERING CREDIT.

Prerequisites & Corequisites: Prerequisite: MATH 1230. Recommended, MATH 1220 or MATH 2000 or MATH 1700.

Credits: 3 hours

Lecture Hours - Laboratory Hours: (3 to 0)

1. A good knowledge of formulating and solving algebraic equations.
2. Differential and integral calculus. (MATH 1230).
3. Understanding and familiarity with computer programming. (Junior Standing).

At the end of the semester, the student should be able to:

1. Determine the time value of money for any type of cash flow (b, f).
2. Evaluate multiple alternatives to determine the best one (b, f).
3. Determine the depreciation of a tangible asset using a variety of methods (b, i).
4. Calculate income taxes for a corporation or an individual (b, f).
5. Use spreadsheets for financial analysis (a, f).

Letters in parentheses refer to the TAC of ABET 2001 criteria.

Objective 1

Be able to determine the time value of money for any given cash flow [1, 2, 3, 4, 5].

Objective 2

Be able to evaluate multiple alternatives to determine the best alternative using several different methods [2, 3, 4, 5].

Objective 3

Be able to compute depreciation of a tangible asset by a variety of methods [3, 4, 5].

Objective 4

Be able to compute the income taxes for a corporation and for an individual [3, 4].

Objective 5

Have the ability of using computerized spreadsheets for analyzing and evaluating a variety of financial problems [5].

Numbers in brackets refer to the method of evaluation as listed in the previous section.

Newnan, Donald G., Jerome P. Lavelle, and Ted G. Eschenbach, Engineering Economic Analysis, (New York: Oxford University Press, 2009, Tenth Edition).

References

Collier, Courtland A. and Glagola, Charles R., Enginering Economic and Cost Analysis, (Menlo Park: Addison Wesley Longman, Inc., 1998, Third Edition).
[TA177.4 .C65 1998]

Sullivan, William G., Wicks, Elin M., and James T. Luxhoj, Engineering Economy, (Upper Saddle River: Prentice-Hall, 2003, Twelfth Edition). [TA177.4 .E539 2003]

Blank, Leland T. and Tarquin, Anthony J., Engineering Economy, (McGraw Hill, 1998, Fourth Edition). [TA177.4 .B58 1998]

Kailash Bafna, Ph.D.

Industrial and Manufacturing Engineering
Western Michigan University
E-212 Parkview Campus
Kalamazoo, Michigan 49008-5336
Phone: (269) 276-3355
Email: kailash.bafna@wmich.edu