Understanding the basic knowledge to use and evaluate monetary issues in financial and investment decision problems
Prerequisite(s)
-
Corequisite(s)
-
Special Requisite(s)
The minimum qualifications that are expected from the students who want to attend the course.(Examples: Foreign language level, attendance, known theoretical pre-qualifications, etc.)
Instructor(s)
Assist. Prof. Dr. İbrahim Ethem Tarhan
Course Assistant(s)
Res. Asst. Ezgi Yıldırım Arslan
Schedule
Tuesday: 13:00-14:45 theory
Friday: 9:00-11:00 practice, section a- 11:00:13:00 section b Ezgi Yıldırım Arslan
Office Hour(s)
Dr. Öğr. Üyesi İbrahim Ethem Tarhan-Office: 2A-14
Wednesday: 10:00-12:00
Teaching Methods and Techniques
-Lecture, presentation
Principle Sources
William G. Sullivan, Wicks and Koelling, Engineering Economy, Prentice Hall; 17th edition (2019)
Other Sources
-
Course Schedules
Week
Contents
Learning Methods
1. Week
Introduction to Engineering Economy, Principles,
methodology & Cost concepts
Present worth, future worth, annual worth, internal rate of return
Oral presentation
8. Week
MIDTERM EXAM
9. Week
External rate of return, payback period methods
Oral presentation
10. Week
Comparing alternatives with equal useful lives
Oral presentation
11. Week
Depreciation and income taxes
Oral presentation
12. Week
Inflation rate problems
Oral presentation
13. Week
Inflation rate problems
Oral presentation
14. Week
Project Presentation
Oral presentation
15. Week
Project Presentation
Oral presentation
16. Week
FINAL EXAM
17. Week
FINAL EXAM
Assessments
Evaluation tools
Quantity
Weight(%)
Midterm(s)
1
30
Homework / Term Projects / Presentations
5
5
Project(s)
1
5
Practice
3
25
Final Exam
1
35
Program Outcomes
PO-1
Ability to apply theoretical and practical knowledge gained by Mathematics, Science and their engineering fields and ability to use their knowledge in solving complex engineering problems.
PO-2
Ability of determining, defining, formulating and solving complex engineering problems; for that purpose develop the ability of selecting and implementing suitable models and methods of analysis.
PO-3
Ability of designing a complex system, process, device or product under real world constraints and conditions serving certain needs; for this purpose ability of applying modern design techniques
PO-4
Ability of selecting and using the modern techniques and devices which are necessary for analyzing and solving complex problems in engineering implementations; ability of efficient usage of information technologies.
PO-5
Ability of designing experiments, conducting tests, collecting data and analyzing and interpreting the solutions to investigate of complex engineering problems or discipline-specific research topics.
PO-6
Ability of working efficiently in intra-disciplinary and multi-disciplinary teams; individual working ability and habits.
PO-7
Ability of verbal and written communication skills; and at least one foreign language skills, ability to write effective reports and understand written reports, ability to prepare design and production reports, ability to make impressive presentation, ability to give and receive clear and understandable instructions
PO-8
Awareness of importance of lifelong learning; ability to access data, to follow up the recent innovation in science and technology for continuous self-improvement.
PO-9
Conformity to ethical principles; knowledge about occupational and ethical responsibility, and standards used in engineering applications.
PO-10
Knowledge about work life implementations such as project management, risk management and change management; awareness about entrepreneurship and innovativeness; knowledge about sustainable development.
PO-11
Knowledge about effects of engineering applications on health, environment and security in global and social dimensions, and on the problems of the modern age in engineering; awareness about legal outcomes of engineering solutions.
Learning Outcomes
LO-1
Recall cost definitions and identify the differences between variable and fixed costs, use cost concept details to determine the least cost one form among several alternatives. Calculate the breakeven point and make a simple sensitivity analysis over fixed, variable costs and price changes. Interpret the breakeven point to make investment appraisal, to make or buy decision and to determine best alternative
LO-2
Calculate profitable domain and optimum production volume and interpret the results for a given non-linear cost function. Solve cost driven design optimization and present economy problems. Calculate simple and compound interests for given interest period, rate and principal amount. Apply equivalence concept and diagram cash flows.
LO-3
Employ interest conversion factors for present to future, future to present, present to annuity, annuity to present, future to annuity and annuity to future for solving equivalence problems. Use gradient series with interest factor conversion to all other cash flow patterns in financial problems. Solve multiple interest factor problems with varying interest rates.
LO-4
Calculate present worth, future worth, annual worth, net present value (NPV), internal rate of return, the external rate of return, simple and discounted payback periods and benefit/cost ratio for evaluating single project under time value of money concept. Appraise investment opportunities based on the results of equivalent worth, rate of return and/or payback period methods.
LO-5
Use present worth, future worth, annual worth, internal rate of return, external rate of return, and benefit / cost ratio method to compare investment and cost alternatives with same or different useful lives. Calculate depreciation deduction amounts using declining balance and straight line methods. Use after-tax analysis to solve engineering economy problems.
LO-6
Convert actual cash flow to real cash flow for given inflation rate. Calculate actual or real present worth, future worth, annual worth, internal rate of return for given inflation rate, combined interest rate or real interest rate. Use break even and sensitivity analysis as non-probabilistic approaches to understand and interpret the effect of uncertainty in engineering economy studies. Solve engineering economy problems when one of the cash flow parameters is given as a random variable following a certain distribution function such as normal or uniform distribution.
