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Course Objectives:
Lecture Arrangements:
For CE + CS
For EE
Course Materials:
Lesson Plan:
Module 1
Introduction to Engineering Economy
Origin, principles, engineering economy and design process,
engineering economic analysis procedure, accounting and engineering
economic studies , types of organization
Module 2
Method of raising capital, Cost Concepts and Design Economics
Introduction, cost estimating and cost terminology, the general
economic environment, break-even point, cost-driven design
optimization
Module 3
Money-Time Relationships and Equivalence
Introduction, simple and compound interests, Equivalence-concept,
cash flow diagrams, simple interest formula for present, future and
annual equivalents
Module 4
Applications of Money-Time Relationships
MARR, PW, FW and AW method, IRR and ERR method, payback period
method
Module 5
Comparing Alternatives
Useful lives equal to study period, useful lives are different among
alternatives, capitalized worth method, mutually exclusive
combinations of projects
Module 6
Depreciation and Income Taxes Introduction, depreciation concepts
and terminology, classical depreciation Methods.Taxation in Nepal-
Taxation laws, corporate tax structure, individual tax structure and
depreciation rates in taxes
Module 7
Cost Estimation Techniques Integrated approach to develop the net
cash flows, parametric cost estimating, cost estimation in the design
process, value engineering
Module 8
Price Changes and Exchange Rates Consumer price index and the
producer price index, foreign exchange rates, price inflation or
deflation, project analysis with price changes
Module 9
Replacement Analysis Reasons and factors for replacement studies,
economic life
Module 10
Dealing with Uncertainty
Risk and uncertainty, sensitivity analysis, risk adjusted MARR