Professional Documents
Culture Documents
Analysis of
Engineering
Projects
ISEN 302-502
Syllabus
Other benefit of taking this course?
Prepare your FE/PE exams. You may take
FE exam during your senior year if you
choose to do so
An Overview of
Engineering
Economic
Analysis
Other Names:
Economic analysis;
Economic justification;
Capital investment analysis;
Economic decision analysis
Personal
Should I buy or lease a new car?
Should I pay off my credit card balance with borrowed
money?
What rate of return did I make with this stock investment?
How much should I save for my retirement?
some value (or range of values) of $X exists for which you are
indifferentthat is, has no preferenceabout receiving $1,000
today versus receiving $X a year from today.
$1 $1 + interest
$1
Learning Objective:
Identify the 10 principles of engineering
economic analysis that can be used by all
engineers in analyzing the economic performance
of the products, processes, and systems they
design.
Because the money can earn interest up until the time the
future dollar is received
Learning Objective :
Identify the seven steps of the systematic
economic analysis technique (SEAT) used to
perform engineering economic analysis.
WACC = (E /V ) ie + (D /V ) id (1 itr )
where
E = a firms total equity, expressed in dollars
D = a firms total debt and leases, expressed in dollars
V = E + D, a firms total invested capital
ie = cost of equity or expected rate of return on equity,
expressed in percent
id = cost of debt or expected rate of return on borrowing,
expressed in percent
itr = corporate tax rate
Homework 1
Online, untimed, ungraded, for practice only
Will be announced on eCampus by the end of today
There is no due date for homework, you can always
go back and try the old problems as you wanted