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ECO1192B
SYLLABUS
Winter semester, 2009
Instructor: Marc Prud’Homme
Department of economics: Desmarais Building, 55 Laurier St.
Office: Room 10115
Administration: Room 10101
Email | Courriel: Marc.PrudHomme@uottawa.ca
Office hours: Thursday 5PM to 6:30 PM
Course Website: www.veblen.ca
uOttawa Website: www.uOttawa.ca
This three-credit course covers discounted cash flow methods for analyzing and
evaluating proposed projects and investments. These basic skills are useful in all
areas of engineering, as well as in many other areas of life (including personal
financial decisions). The course begins with fundamental methods for identifying
what is involved in an investment decision, what is relevant, and what is not, and
the financial mathematics needed to deal with the relevant data. Then we will cover
the ways in which investment decisions are measured (e.g., present worth, internal
rate of return, and equivalent cash flow), as well as the effect of income taxes. We
also look at what is needed to adapt the general methods to some types of
commonly occurring situations (such as retirement/replacement decisions and
capital budgeting), and at the effects of financing, inflation, and uncertainty on the
analyses.
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Objectives
After successfully completing this course, you should be able to:
• Correctly apply discounted cash-flow analysis to evaluate proposed capital
investments.
• Recognize, formulate, and analyze cash-flow models.
• Explain the results of your models to managers and other non-specialist decision
makers.
Distribution of information
You are expected to attend all classes. You are responsible for assignments or
policies that are announced in class or handed out in class, whether or not you are
in class to receive the information. You are also responsible for any material
distributed electronically by email or via the web.
There is an email class list for this course, which will be used for general
information, reminders, clarifications, grade distribution, and other purposes (such
as interesting news articles related to the topic of the course).
Student Questions
Please let us know how we can help you. I would encourage you to ask questions in
class, attend office hours, set up individual appointments (if our office hours do not
fit with your schedule), and contact me by email to get answers to any questions you
may have. My time to help is limited, and sometimes I will be away from my office or
out of town, but when I am available, I am happy to help.
From your point of view, getting into the habit of asking questions:
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In fact, research in human cognition demonstrates that if you take the time to
reflect on your learning, your performance could improve by 30-40%! From our
point of view, hearing your questions allows us to:
There is nothing wrong with asking “stupid” questions (e.g., asking for clarification
of basic ideas, or questions about things that you should have learned before this
class). The whole point is to get such areas of confusion cleared up as soon as
possible, so that they do not continue to hold you back in learning the material.
Course materials
This course has one required textbook. The text is listed here;.
Required text
N.M. Fraser, Jewkes, E.M., Bernhardt, I., and Tajima, M., Global Engineering
Economy: Financial Decision Making for Engineers, Fourth Edition, Pearson
Canada, 2009
Required Work
There will be 4 assignments during the semester. The problems will be drawn
mostly from the end-of-chapter questions from the textbook. Because of limited
grading resources, not all the required problems in the assignments will
necessarily be graded but you are expected to work them all.
You are encouraged to join with other students in discussing the course work,
including homework. However, you must prepare the work that you hand in by
yourself. It is fine to work with others in deciding how to do something and in
working out the solution, but you have to write it up on your own.
If you believe that your grade on an assignment or examination is in error, you can
request adjustment of the grade no later than two weeks after the due date of the
item (in other words, one week after your graded work was returned to you). After
that time, adjustments will not be made.
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Work as many of the end-of-chapter problems as you can. Answers to the odd-
numbered problems are available at he end of the book.
There will also be two partial examinations during the semester. These exams last
about 60 minutes and consist of multiple choice questions.
The book also includes a CD-Rom with additional problem sets with solutions that
you can explore.
Towards the second half of the semester, a project will be distributed for which you
are expected to apply your knowledge of some of the concepts you have learned in
class using a spreadsheet program such as Excel.
Please note that in all examinations in this course, you will be given a some interest tables
and a formula sheet.
Evaluation
Your course grade will be based on your final course average. Graded work will be
weighted as follows: homework assignments, 20%; project, 20%; two in-class exams
at 10% each; and a final exam, 40%.
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Chapter Topic Comment
An introduction to the subject. Most of
1 Engineering decision making the material should be read but will not
be covered in depth in class.
This is the core material for this course
course. If there was ever a chapter you
needed to invest some time in, this is the
2 Time value of money
one. Do as many end-of-chapter problems
as you can. It will pay off in the near
future.
Another important chapter for which you
will be using its content for the
3 Cash flow analysis remainder of the semester. Again work as
many problems as you can from this
chapter.
4 Comparison methods Part 1 All of the chapter is to be covered.
Comparison methods Part 2
5 All of the chapter is to be covered.
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Absence from an examination or late submission of an assignment
Absence from any examination or test, or late submission of assignments due to
illness, must be justified; otherwise, a penalty will be imposed. The Faculty
reserves the right to accept or reject the reason offered. Reasons such as travel,
employment, and misreading the examination schedule are not usually accepted.
Last session, most of the students found guilty of fraud were given an « F » for
the course and had between three and twelve credits added to their program
requirement.
For more information, refer to:
http://www.uottawa.ca/academic/info/newsletter/fraud_e.html