Jun 03, 2023  
2023-2024 Undergraduate Academic Catalog 
2023-2024 Undergraduate Academic Catalog [ARCHIVED CATALOG]

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IND 2700 - Engineering Economics

3 lecture hours 0 lab hours 3 credits
Course Description
This course is intended to provide the fundamental techniques for the monetary quantification of engineering and business decisions over time, particularly under uncertainty.  Monetary systems and accounting approaches are presented in the context of their application to engineering work.  Financial analysis techniques are developed along with their applicability to various types of products.  The effects of interest rates, inflation rates, and tax rates are applied to optimal business decision-making. (prereq: MTH 1110 ) (quarter system prereq: MA 137)
Course Learning Outcomes
Upon successful completion of this course, the student will be able to:
  • Comprehend the basis of trade and money in a business context
  • Contrast the effects of changing supply and demand on prices and costs
  • Understand the roles of profit, cash, and cost in decision-making related to engineering projects
  • Apply a debit and credit based financial accounting system to basic business transactions
  • Represent complex, multi-payment transactions graphically using cash-flow diagrams
  • Calculate the changing value of money over time
  • Evaluate the worth of the costs and incomes of projects and investments
  • Apply discounted cash-flow analysis to evaluate proposed capital investments
  • Use basic calculus to solve economic allocation optimization problems
  • Determine the effect of changing interest, inflation rates, and project risk on business decisions
  • Allocate overhead in manufacturing, service, and other engineering-oriented projects
  • Relate the specific roles that depreciation, inventory valuation, and time offsetting play in engineering related business operations
  • Recognize the ethical and legal issues related to financial analysis

Prerequisites by Topic
  • Limits and series

Course Topics
  • Micro-economic theory of supply and demand
  • Financial terminology and monetary systems
  • Accounting systems used in engineering work
  • Inflationary and deflationary environments
  • Interest rates and discount rates for monetary return
  • Present value and future value within the time value of money
  • Nominal and effective interest rates
  • Arithmetic annuities
  • Geometric annuities
  • Mortgages and other debt structures
  • Annual worth and permanent worth
  • Benefit/cost calculations
  • Breakeven analysis
  • Economic decision making and optimization
  • Sensitivity analysis
  • Reverse annuities
  • Depreciation and depletion methods
  • Tax systems and their effect on engineering decision-making
  • After-tax cash-flow analysis

Dr. Aaron Armstrong

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