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MECH4830

Engineering Economic Analysis

10 Units 4000 Level Course

Available in 2012

Callaghan CampusSemester 1

Previously offered in 2013, 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004

The objective of this course is to teach the concepts of engineering economic analysis and its role in solving problems. It is designed to provide engineers with the tools needed for rigorous presentation of the effect of the time value of money on engineering decision making. The course isolates those problems that are commonly faced by engineers and develops the tools to properly grasp, analyse, and solve them. The tools introduced include present worth analysis, annual cash flow, rate of return, incremental analysis, future worth analysis, and payback period. The course also covers such topics as depreciation, after tax analysis, replacement analysis, inflation, and deflation.

Objectives
Engineering problems solving (A)
Time value of money (B)
Cash flow analysis (C)
Engineering economics analysis techniques (D)
Depreciation (E)
Taxation (F)
Project management (G)
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A) Engineering Science (including, Mathematics, Science, Engineering Principles, Skills and Tools)

B,C,D,E,F,G) Design Projects

A) Mechanical Engineering Specialisation

D,E,F,G) Professional Engineering Practice
Content
- Introduction and the decision making process
- Engineering decision making
- Equivalence and compound interest
- Nominal and effective interest
- Present worth analysis
- Annual cash flow
- Rate of return analysis
- Rule of signs and external interest rate
- Incremental rate of return analysis
- Graphical solutions
- Future worth analysis
- Benefit-cost ratio analysis
- Payback period
- Sensitivity and breakeven analysis
- Basic aspects of depreciation
- Depreciation techniques
- Taxable income and income taxes rates
- Analysis taking income taxes into account
- Replacement analysis techniques
- Equipment replacement models
- Basics of inflation and deflation
- Inflation effects on before and after
- tax calculations
Replacing Course(s)
Not Applicable
Transition
Not Applicable
Industrial Experience
0
Assumed Knowledge
Not Applicable
Modes of Delivery
Flexible Delivery / Student Centred Learning
Internal Mode
Teaching Methods
Lecture
Seminar
Assessment Items
Quiz - Class
Progressive assessment by way of class quizes.
* Note, any modification to the above assessment arrangement will appear on the course outline normally issued in week 1.
Contact Hours
Lecture: for 3 hour(s) per Week for Full Term

Timetables

2012 Course Timetables for MECH4830