CH1 - What would you do with this information, to advise...

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MSci 261 Engineering Economics: Financial Management for Engineers Instructor: Mehrdad Pirnia Winter 2011
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Course Organization Marking Scheme End of Jan Quiz 6% 3 Spreadsheet Assignments 9% Midterm Exam 35% Final 45% Class Participation 5% Midterm Exam: Wed. Feb 16, 8:30-10:30 a.m. Final Exam: time to be announced Lecture Style: Students read the text Instructor & TA present examples in class & tutorial; discuss & solve examples and notes posted on ACE, but NOT SOLUTIONS “Keep up; don’t catch up”
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Example 1.1: Choose a Production Line Design (to operate for 5 years) Automated Line equipment & installation costs $900,000 now More Manual Line equipment & installation costs $500,000 now
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Unformatted text preview: What would you do with this information, to advise your boss ? Example 1-2: Choose a building design for a village lot. It will be rented out for 20 years. One-storey building costs $250,000 now, to build it costs $4000/year for maintenance, property taxes rental receipts of $26,000/year Two-storey building costs $400,000 now, to build it costs $6000/year for maintenance, property taxes rental receipts of $40,000/year Is either choice profitable ? Which one is better ? General Flow of Engineering Economic Analyses 2. Identify the Alternatives 3. Estimate Cash Flows for Each Alternative 4. Calculate Measures for Evaluation of Each Alternative 5. Use the Measures to Help Choose the Best Alternative The course is mostly about steps 4 and 5 1. Characterize the problem...
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This note was uploaded on 05/17/2011 for the course MSCI 261 taught by Professor Bonkoo during the Spring '09 term at Waterloo.

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CH1 - What would you do with this information, to advise...

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