Engineering Economics

Fundamental concepts, terminology, and the economic environment in engineering.

Understanding simple and compound interest, cash flow diagrams, and the core concept of time value.

Analysis of uniform series (annuities), deferred annuities, perpetuities, and arithmetic/geometric gradients.

Distinguishing between nominal and effective rates, and handling discrete vs. continuous compounding.

Evaluating alternatives using the Present Worth method, Least Common Multiple (LCM), and Capitalized Cost.

Comparing alternatives using Future Worth, Annual Worth methods, and Capital Recovery.

Calculating Internal Rate of Return (IRR), External Rate of Return (ERR), and Incremental Analysis.

Understanding the effects of inflation, real vs actual dollars, and the Fisher Equation in engineering economic analysis.

Methods of depreciation including Straight Line, Declining Balance, SYD, MACRS, and Depletion.

Determining when an existing asset should be replaced by calculating Economic Service Life (ESL) and analyzing Defender vs Challenger.

Public sector project analysis using B/C ratio and Payback Period methods.

Decision making under uncertainty using Break-Even (linear and non-linear) and Sensitivity analysis.

Performing economic evaluations considering the impact of corporate taxes, effective tax rates, and After-Tax Cash Flow (ATCF).

Selecting a portfolio of independent projects under a strict capital constraint.