| Class date(s):
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11 September onwards
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| Download video: Link [113 M]
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| Download video: Link [109 M]
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| Download video: Link [122 M]
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| Download video: Link [110 M]
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| Download video: Link [118 M]
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| Download video: Link [113 M]
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| Download video: Link [111 M]
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| Download video: Link [112 M]
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| Download video: Link [119 M]
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| Download video: Link [99 M]
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Selected references
The following printed materials have influenced the course content. In alphabetical order:
| Author(s)
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Title
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Library link
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Google search for ISBN
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Amazon link for ISBN
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| Blank and Tarquin
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Engineering Economy (7th edition, or earlier)
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McMaster
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Google
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Amazon
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| Fraser et al.
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Engineering Economics in Canada (3rd edition, or earlier)
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McMaster
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Google
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Amazon
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| Fraser et al.
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Global Engineering Economics (4th edition, or earlier)
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McMaster
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Google
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Amazon
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| Park, Zuo and Pelot
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Contemporary Engineering Economics, a Canadian perspective (3rd edition, or earlier)
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McMaster
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Google
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NA
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| Stermole and Stermole
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Economic Evaluation and Investment Decision Methods (13th edition, or earlier)
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NA
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Google
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Amazon
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| Turton et al.
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Analysis, Synthesis and Design of Chemical Processes (4th edition, or earlier)
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McMaster
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Google
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Amazon
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- A spreadsheet of inflation information specific to the process industries. Print this out for the midterm.
Class slides
The slides are in tab 3 of the notes.
11 September 2012
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.
13 September 2012
We continue considering the time value of money (TVM) and do some class exercises.
- Slides: We cover slides 24 to 29. Slides 30 and 31 will feature in the next tutorial.
- Audio and video recording of the class
14 September 2012
- We wrap up the TVM section with one more example and then continue looking at Measures of Profitability: slides 32 to 42
- Audio and video (bad sound!)
18 September 2012
- We continue with various Measures of Profitability: slides 42 to 48
- Audio and video recording of the class
20 September 2012
- We will wrap up Measures of Profitability (slides 49 to 54); including jumping ahead to slides 88 to 90.
- If you are looking for some more information regarding NPV vs DCFRR, please read this tutorial, or use this Google search to understand the subtleties.
- Audio and video recording of the class
21 September 2012
- We will cover Depreciation, slide 63 to 80.
- Audio and video recording of the class
- Here are the websites used in today's class if you want more information on CRA's rules on depreciation (called Capital Cost Allowance, CCA):
25 September 2012
- We will (re)cover the effect of depreciation and taxes on NPV, slides 78 to 83 and go through the tutorial/assignment 3. We will also discuss the SDL project selection procedure.
- Audio and video recording of the class
- Please see this PDF slide 80 from the course notes. Note the following relationships:
- \( \text{G} = \text{C}+\text{E} \)
- \(\text{H} = \text{A}-\text{B} - \text{G} = \text{Total income} - (\text{Eligible expenses}) - \text{Depreciation}\)
- \(\text{J} = p_\text{tax} \cdot\text{H} = 0.35 \text{H} \)
- \(\text{L = NCFAT} = \text{A} - \text{B} - \text{J} - \text{K} = \text{A} - (\text{B} + \text{K}) - \text{J} = \text{Total income} - (\text{Total expenses}) - \text{Tax paid}\)
- \(\text{L} \) = this is the line we use for our NPV calculation
- \(\text{M} = \displaystyle \frac{\text{L}}{\left(1+i_\text{MARR}\right)^n}\)
- Important note: I've assumed that expenses are entered as positive numbers. This allows me to write, for example, \( \text{H} = \text{A} - \text{B} - \text{G} = \text{Total income} - (\text{Eligible expenses}) - \text{Depreciation}\). If you use negative signs in front of your dollars, which is what the spreadsheet in the course notes does, then adjust these formulas.
27 September 2012
- We will cover sensitivity analysis on an NPV, slides 104 to 115
- Audio and video recording of the class
- The publication by Adams and Barton with NPV for polygeneration.
- An alternative way to visualize sensitivity analysis data shown in class:
28 September 2012
02 October 2012
- Capital cost estimation review, focusing on the what the bare module (BM) cost is; slides 128 to 137
- Audio and video recording of the class
04 October 2012
- Continuing with capital cost estimation and some examples; slides 138 to 155
