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ECON 280 Engineering Economics
Spring 2008

• Course Objective
  The main objective is to enable students
  To learn the cost concepts and the principles of money-time relationships,
  To learn the applications of money–time relationships in engineering,
  To learn how to evaluate business and engineering assets, and
  To learn how to handle risk and uncertainty.

• Course Calendar
  Lecture hours Tuesday 09:40-10:30, Thursday 09:40-11:30
  Room R 110
  Office hours Tuesday 10:40-11:30

• Evaluation
  Assignment (15 %, due May 30, 2008)
  Midterm exam (35%, 17:40 on April 25, 2008)
  Final exam (50%)

  
  

  Outline of topics

  Cost concepts and money-time relationships
  1. Introduction
  2. Financial Statements
  3. Interest rate and economic equivalence
  4. Money, interest rates, and debt management
  
  Evaluation of Business and Engineering Assets
  5. Present-worth analysis
  6. Annual equivalent-worth analysis
  7. Rate-of-return analysis
  
  Analysis of Project Cash Flows
  8. Cost concepts for decision making
  9. Depreciation and corporate taxes
  10. Project cash flows
  
  Handling Risk and Uncertainty
  11. Inflation and its impact on project cash flows
  12. Project risk and uncertainty
  13. Real-options analysis
  
  Special topics
  14. Replacement decisions
  15. Capital-budgeting decisions
  16. Economic analysis in the service sector

  
  
  

.: 2006 ERC METU | Updated 16 February 2008 :.