Available in 2018
Course code

MECH4830

Units

10 units

Level

4000 level

## Course handbook

### Description

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.

### Availability

#### UoN Singapore

• Trimester 2 - 2018 (Singapore)

#### Callaghan

• Semester 1 - 2018

### Learning outcomes

On successful completion of the course students will be able to:

1. Define, estimate and analyse engineering project costs

2. Develop, evaluate, and compare engineering project cash flows

3. Develop and apply mathematical models describing real life cash flows and time value of money

4. Formulate and apply interest factors to real life engineering problems

5. Evaluate engineering alternatives by economic analysis techniques and models

6. Discuss and solve advanced economic engineering analysis problems including taxation and inflation

### 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

Quiz: Quiz 1

Quiz: Quiz 2

Quiz: Quiz 3

Quiz: Quiz 4

### Contact hours

#### Callaghan and UoN Singapore

##### Lecture

Face to Face On Campus 3 hour(s) per Week for Full Term