Difference between revisions of "Engineering economics - 2014"
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In this class we give an overview of the "Engineering Economics" section of the course. We start by introducing the topic of the time-value of money. | In this class we give an overview of the "Engineering Economics" section of the course. We start by introducing the topic of the time-value of money. | ||
| [[Media:Economics-4N04- | | [[Media:Economics-4N04-2014-Part-1.pdf |Slides]] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-02A.mp4 Video] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-02A.mp4 Video] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-02A.mp3 Audio] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-02A.mp3 Audio] | ||
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We looked at the investing point of view last class; in this class we look at the inflationary viewpoint and why money in the future is worth less in today's terms. | We looked at the investing point of view last class; in this class we look at the inflationary viewpoint and why money in the future is worth less in today's terms. | ||
| [[Media:Economics-4N04- | | [[Media:Economics-4N04-2014-Part-1.pdf |Slides]] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-02B.mp4 Video] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-02B.mp4 Video] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-02B.mp3 Audio] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-02B.mp3 Audio] | ||
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We looked at an example the considered the time value of money; then discussed various criteria related to assessing an investment. Our focus in the next class is more detail around these "profitability metrics" | We looked at an example the considered the time value of money; then discussed various criteria related to assessing an investment. Our focus in the next class is more detail around these "profitability metrics" | ||
| [[Media:Economics-4N04- | | [[Media:Economics-4N04-2014-Part-1.pdf |Slides]] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-02C.mp4 Video] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-02C.mp4 Video] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-02C.mp3 Audio] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-02C.mp3 Audio] | ||
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We looked at what NPV means and how you can explain it to someone else. Details around payback time, and the minimum acceptable rate of return (MARR) were discussed. | We looked at what NPV means and how you can explain it to someone else. Details around payback time, and the minimum acceptable rate of return (MARR) were discussed. | ||
| [[Media:Economics-4N04- | | [[Media:Economics-4N04-2014-Part-1.pdf |Slides]] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-03A.mp4 Video] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-03A.mp4 Video] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-03A.mp3 Audio] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-03A.mp3 Audio] | ||
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We saw how the MARR is used to compare an investment, and that DCFRR > MARR for a worthwhile investment. We considered how to select among independent alternative investments. | We saw how the MARR is used to compare an investment, and that DCFRR > MARR for a worthwhile investment. We considered how to select among independent alternative investments. | ||
| [[Media:Economics-4N04- | | [[Media:Economics-4N04-2014-Part-1.pdf |Slides]] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-03B.mp4 Video] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-03B.mp4 Video] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-03B.mp3 Audio] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-03B.mp3 Audio] | ||
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We started to consider the effect of depreciation on cash flows. | We started to consider the effect of depreciation on cash flows. | ||
| [[Media:Economics-4N04- | | [[Media:Economics-4N04-2014-Part-2.pdf |Slides]] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-03C.mp4 Video] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-03C.mp4 Video] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-03C.mp3 Audio] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-03C.mp3 Audio] | ||
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We see how tax and depreciation combine to affect cash flows and TVM. | We see how tax and depreciation combine to affect cash flows and TVM. | ||
| [[Media:Economics-4N04- | | [[Media:Economics-4N04-2014-Part-2.pdf |Slides]] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-04A.mp4 Video] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-04A.mp4 Video] | ||
| [http://learnche.mcmaster.ca/media/2014-4N4-Class-04A.mp3 Audio] | | [http://learnche.mcmaster.ca/media/2014-4N4-Class-04A.mp3 Audio] | ||
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We will quickly wrap up the prior case study, and the consider the estimation of capital costs. | We will quickly wrap up the prior case study, and the consider the estimation of capital costs. | ||
| colspan="3" | | | colspan="3" | | ||
[[Media:Economics-4N04- | [[Media:Economics-4N04-2014-Part-3.pdf |Slides]] '''← these are new''' | ||
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'''← these are new''' | '''← these are new''' | ||
* Some [[Media:Economics-4N04- | * Some [[Media:Economics-4N04-2014-06A.pdf |extra slides on economic problems]] were donated by Dr. Marlin. They are for you to complete in your own time. | ||
--> | --> | ||
Revision as of 17:25, 23 September 2014
| Class date(s): | 08 September 2014 onwards | ||||
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Selected references
The following printed materials have influenced the course content. In alphabetical order:
| Author(s) | Title | Library link | Google search for ISBN | Amazon link for ISBN |
|---|---|---|---|---|
| Blank and Tarquin | Engineering Economy (7th edition, or earlier) | McMaster | Amazon | |
| Fraser et al. | Engineering Economics in Canada (3rd edition, or earlier) | McMaster | Amazon | |
| Fraser et al. | Global Engineering Economics (4th edition, or earlier) | McMaster | Amazon | |
| Park, Zuo and Pelot | Contemporary Engineering Economics, a Canadian perspective (3rd edition, or earlier) | McMaster | NA | |
| Peters and Timmerhaus | Plant Design and Economics for Chemical Engineers | McMaster | Amazon | |
| Stermole and Stermole | Economic Evaluation and Investment Decision Methods (13th edition, or earlier) | NA | Amazon | |
| Turton et al. | Analysis, Synthesis and Design of Chemical Processes (4th edition, or earlier) | McMaster | Amazon | |
| Woods, Donald | Cost Estimation for the Process Industries (McMaster download, 30 Mb) | NA | NA | NA |
Class slides, videos, and other resources
| Date | Class number | Topic | Slides for class | Video and audio files | References and Notes | |
|---|---|---|---|---|---|---|
| 08 September | 02A |
In this class we give an overview of the "Engineering Economics" section of the course. We start by introducing the topic of the time-value of money. |
Slides | Video | Audio |
|
| 10 September | 02B |
We looked at the investing point of view last class; in this class we look at the inflationary viewpoint and why money in the future is worth less in today's terms. |
Slides | Video | Audio |
|
| 12 September | 02C |
We looked at an example the considered the time value of money; then discussed various criteria related to assessing an investment. Our focus in the next class is more detail around these "profitability metrics" |
Slides | Video | Audio |
We will be covering not only engineering economics in 4N, but also a bit of "personal economics".
|
| 15 September | 03A |
We looked at what NPV means and how you can explain it to someone else. Details around payback time, and the minimum acceptable rate of return (MARR) were discussed. |
Slides | Video | Audio |
|
| 17 September | 03B |
We saw how the MARR is used to compare an investment, and that DCFRR > MARR for a worthwhile investment. We considered how to select among independent alternative investments. |
Slides | Video | Audio |
|
| 19 September | 03C |
We started to consider the effect of depreciation on cash flows. |
Slides | Video | Audio |
|
| 22 September | 04A |
We see how tax and depreciation combine to affect cash flows and TVM. |
Slides | Video | Audio |
|
| 24 September | 04B |
We will quickly wrap up the prior case study, and the consider the estimation of capital costs. |
Slides ← these are new |
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