Engineering Economics: Concepts And Numerical Examples

Fundamentals of Engineering Economy

What you'll learn

Understand the concept of time value of money

Recognize simple and compound interest rates

Discuss arithmetic and gradient gradient series

Compute present worth, annual worth and future worth of investments

Perceive the concepts of nominal and effective interest rates

Address the cases of continuous compounding and variable interest rates

Analyze the economic feasibility of independent and mutually exclusive projects

Conceive the payback period method

Apply the concepts of internal and external rate of returns

Adopt the incremental approach in economic analysis

Implement SIR ratio and capitalized equivalent method

Deploy sensitivity analysis in financial analysis

Assess the capital budgeting of projects

Undertake different depreciation methods of assets

Perform asset replacement analysis

Take economic decisions under inflation

Requirements

No prior knowledge of construction management is required

Description

Engineering economics is the domain that accommodates the implementation of economic techniques for the evaluation of engineering alternatives.  This course is designed to deliver the fundamental concepts of engineering economy to the audience. It is a +6 hour course that covers the basics and numerical examples of engineering economics. This course covers the following topics: time value of money, arithmetic and geometric series, nominal and effective interest rates, measuring the worth of investment, rate of return analysis, comparison of alternatives, supplementary analysis, capital budgeting, depreciation methods, asset replacement analysis, and inflation analysis. This course tackles several methods of investment appraisal such as payback period, net present worth, net future worth, net annual worth, internal rate of return, external rate of return, savings/investment ratio and capitalized equivalent. With regards to asset depreciation, this course addresses the methods of straight line, units of production, sum of years digit, declining balance, and double declining balance. The content of this course also displays the computational procedures of sensitivity analysis and break-even analysis. As for replacement analysis, students will learn the approaches of insider viewpoint (cashflow) approach and outsider viewpoint (opportunity cost). As for inflation analysis, students will comprehend the terms of inflation rate, inflation free interest rate, market interest rate, real dollars and actual dollars. Students can find more than 130 solved examples in this course.

Overview

Section 1: Overview and Context

Lecture 1 Course Syllabus

Section 2: Time Value of Money

Lecture 2 Time Value Money

Lecture 3 Interest Rates

Lecture 4 Cashflow Analysis

Lecture 5 Uniform Cashflow

Section 3: Arithmetic and Geometric Series

Lecture 6 Arithmetic Series

Lecture 7 Geometric Series

Lecture 8 Captal Recovery

Lecture 9 Composite Cashflow

Section 4: Nominal and Effective Interest Rates

Lecture 10 Compounding Concept

Lecture 11 Effective Interest Rate

Lecture 12 Continuous Compounding

Lecture 13 Variable Interest Rates

Section 5: Comparison of Alternatives I

Lecture 14 Introduction

Lecture 15 Screening Method

Lecture 16 PW, FW and AW

Lecture 17 Examples

Section 6: Comaprison of Alternatives II

Lecture 18 Internal Rate of Return

Lecture 19 Multiple RORs

Lecture 20 External Rate of Return

Lecture 21 Incremental Approach

Section 7: Comparison of Alernatives III

Lecture 22 SIR Ratio

Lecture 23 Capitalized Equivalent

Lecture 24 Rate of Return Analysis

Lecture 25 Supplementary Analysis

Section 8: Capital Budgeting and Asset Depreciation

Lecture 26 Capiral Budgeting

Lecture 27 Enumeration Method

Lecture 28 Accounting Depreciation

Lecture 29 Depreciation methods

Section 9: Asset Replacement Analysis

Lecture 30 Basic Concepts

Lecture 31 Defender and Challenger

Lecture 32 Economic Service Life

Lecture 33 Optimal Replacement Time

Section 10: Economic Analysis Under Inflation

Lecture 34 Decisions Under Inflation

Construction managers,,Civil engineers,Construction engineering students,Business and economics students