Engineering Economics Part 2: Introduction to Engineering Economics TSYH 4721

Upon successful completion, the student will be able to:

Module 6 - Introduction to Evaluation Techniques

• Determine the Payback Period, simple Rate of Return, Net Present Value, Benefit Cost Ratio, and Internal Rate of Return from descriptions of before tax cash flow schemes.
• Identify the advantages and disadvantages of the commonly used techniques of evaluation.

Module 7 - Evaluation of Proposals with Differing Lifetimes

• Evaluate proposals with differing lifetimes using the method of Lowest Common Multiple of Lifetimes.
• Evaluate proposals with differing lifetimes using the method of Capitalized Costs.
• Evaluate proposals with differing lifetimes using the method of Equivalent Uniform Annual Worth.

Module 8 - Cash Flows after Taxes

• Determine Capital Cost Allowances using the Straight Line and Constant Rate methods.
• Prepare cash flows after taxes (CFAT) schedules from text descriptions.
• Perform NPV evaluations incorporating income taxes for single item accounting and grouped assets accounting.

Module 9 - Replacement Evaluation

• Evaluate replacement of asset proposals in the before tax situation.
• Determine EUAC for assets belonging to a grouped CCA class in the after tax situation.
• Determine the optimal placement policy for new assets in the after tax situation.
• Evaluate replacement of existing asset.

Effective as of Fall 2003