IE 423 - Engineering Economy

• Analyze and evaluate financial alternatives by determining the worth of systems, products and services in relation to cost
• Correctly apply discounted cash-flow analysis to evaluate proposed capital investments
• Acquire, analyze and interpret project data
• Recognize, formulate and analyze cash-flow models
• Determine economic feasibility when evaluating alternatives
• Apply sensitivity analysis to economic decision making
• Explain the results of the cash flow models to managers and others not versed in engineering economic analysis

• College algebra

• Why engineering economy?
• Interest and interest rate
• Rate of return
• Equivalence
• Engineering economics terminology
• Minimum Attractive (or Acceptable) Rate of Return (MARR)
• Cash flows
• Single-payment factors
• Uniform series present worth factor and capital recovery factor
• Sinking fund factor and uniform series compound amount factor
• Interpolation
• Arithmetic gradient factors
• Geometric gradient series factors
• Determination of an unknown interest rate
• Determination of an unknown number of years
• Combining factors
• Nominal and effective interest rates; interest rates varying over time
• Present worth analysis
• Annual worth analysis
• Rate of return analysis
• Benefit-cost ratio analysis
• Breakeven and sensitivity analysis
• Payback period analysis