Engineering economics - 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	Google	Amazon
Fraser et al.	Engineering Economics in Canada (3rd edition, or earlier)	McMaster	Google	Amazon
Fraser et al.	Global Engineering Economics (4th edition, or earlier)	McMaster	Google	Amazon
Park, Zuo and Pelot	Contemporary Engineering Economics, a Canadian perspective (3rd edition, or earlier)	McMaster	Google	NA
Peters and Timmerhaus	Plant Design and Economics for Chemical Engineers	McMaster	Google	Amazon
Stermole and Stermole	Economic Evaluation and Investment Decision Methods (13th edition, or earlier)	NA	Google	Amazon
Turton et al.	Analysis, Synthesis and Design of Chemical Processes (4th edition, or earlier)	McMaster	Google	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	All the spreadsheet examples used in this section of the course are available.
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	See various "Andex charts" of the form in class
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". Take a look at this article. As engineers, you will have to decide on finances for the company are you working for, which is no different to making financial decisions for your own life. And then another article about the rising cost of tuition that is coming along: "Stock up on ramen noodles: cost of university to rise 13 per cent over four years"
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	Self-learning: here's an interesting PDF explaining time value of money and other engineering economic concepts
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	Companies raise money by issuing stocks, but after their IPO, the stocks are bought and sold outside the company. Read this article to understand though why companies care about their stock prices.
19 September	03C	We started to consider the effect of depreciation on cash flows.	Slides	Video	Audio	Investigate the various classes of CCA on the CRA website.
22 September	04A	We see how tax and depreciation combine to affect cash flows and TVM.	Slides	Video	Audio	The cashflow handout that was supplied in class (for you to practice with) See the spreadsheet with all calculations from today's class.
24 September	04B	We will quickly wrap up the prior case study, and the consider the estimation of capital costs.	Slides	Video	Audio
26 September	04C	Tyler will be teaching the class today around sales and (non-capital) cost estimation. I will be away from campus.	Slides		Audio	Video recording of this class is not possible.
29 September	05A	We covered the start of capital cost estimation: looking at capacity factors and inflation factors	Slides	Video	Audio	A spreadsheet of capital cost inflation information specific to the process industries. Print this out for the midterm. A reading on the Chemical Engineering Plant Cost Index (CEPCI)
01 October	05B	We started looking at how to use the cost correlations from tables, and adjust them for capacity, materials, operations and inflation.	Slides	Video	Audio
03 October	05C	We continued and finished the capital costing section.	Slides	Video	Audio
06 October	06A	We will start (and finish) the final short section of the economics topic: sensitivity analysis	Slides	Video	Audio

Some extra slides on economic problems were donated by Dr. Marlin. They are for you to complete in your own time. They are good practice for the midterm.