Engineering Economics

IEN 351
Fall Semester 2015 -2016
Prof. Magdy Zahw
 COURSE PARTICULARS

Course Code: IEN 351

Course Title: Engineering Economics

No. of Units: 2 Credit hours

Course Duration: Two hours of Lecture and one hour of tutorial

per week for 15 weeks

Prerequisite: NIL
 COURSE INSTRUCTOR

Supervisor: Prof. Magdy Abdelaziz Zahw

Civil Engineering Department

Contacts:
Office # 212
Phone: 207
Email: magdy_zahw@cic-cairo.com
 COURSE DESCRIPTION

This course is for engineering students who are studying their first
formal course in engineering economy. The course contents are;
- Introduction to Engineering Economy.
- Cost concepts, Time value of money operations.
- Measuring the worth of investments: Present worth, Future
worth, Annual worth, Payback period, Internal and external,
Capitalized worth, Comparison of alternatives.
- Depreciation.
- Replacement analysis.
- Economic analysis of public projects.
- Engineering decision making, break-even analysis
 COURSE OBJECTIVES

Students completing this course successfully will be able to:

Understand the fundamental concepts of engineering economy.
Derive and use the engineering economy factors to account for the
time value of money.
Understand and use interest rates and cash flows in engineering
practice.
Measure the worth of investments: Present worth, Future worth,
Annual worth, Payback period, Internal and external, Capitalized
worth, Comparison of alternatives.
Consider inflation in an engineering economic analysis.
Understand the concepts of replacements of aged systems.
Understand methods of depreciation.
Understand economical analysis of public projects.
Understand engineering decision making, break-even analysis.
 COURSE LEARNING OUTCOME

1. Recognize the time value of money and its operations.

2. Compare projects alternatives by different techniques.

3. Measure and determine depreciation and replacement.

4. Compare the economics of different projects in public and

regulator sectors.

5. Recognize the cost concepts and the cost terminology.

 GRADING SYSTEM FOR THE COURSE

This course will be graded as follows:

Class Attendance 5% until to 25% Absence

Assignments 5%
Quizzes 10%
Mid Term Exam 20%
Final Examination 60%

TOTAL 100%
 TEXT BOOK AND REFERENCES

Principles of Engineering Economic Analysis, J. A. White, K. E.

Case, and D. B. Pratt, 5th edition, John Wiley & Sons, Inc.,
2009.

E. Paul DeGarmo and John R. Canada. Engineering Economy,

5th Edition, Macmillan Publishing Co. Inc., New York, USA,
573p. Eugene L.

Grant and W. Grant Ireson. Principles of Engineering Economy,

4th Edition, The Ronald Press Company, New York, 574p.
 COURSE OUTLINE
Engineering Economics (IEN 351)

Topics Week Lecture %

Covered Introduction to Engineering Economic Analysis: Time value of money, Principles
And Weekly 1 of Engineering Economic Analysis, Economic Analysis Techniques.
Plan
Time Value Of Money: Cash Flow Diagrams, Simple Interest Calculations,
4%
2 Compound Interest Calculations, Multiple Compounding Periods in a year and
Continuous Compound Interest Calculations.
Equivalence and Indifference , Variable Interest Rates, Establishing the Planning
3 Horizon
4 Measure of Worth:
Present Worth Analysis: Single Alternative, Multiple Alternatives, One shot
5 investment,
Payback Period: Single Alternative, Multiple Alternatives
Future Worth Analysis: Single Alternative, Multiple Alternatives, One shot
6%
investment,
6 Annual Worth Analysis: Single Alternative, Multiple Alternatives, Least Common
Multiple of Lives Assumption, Capital Recovery Cost
Internal Rate of Return: Single Alternative, Multiple Alternatives
External Rate of Return: Single Alternative, Multiple Alternatives
7 Midterm Exam 20%

8 Depreciation.

9 Replacement Analysis:

10 Inflation Effects: Before- Tax Analysis in Inflationary Conditions 10%

11 Economic Analysis of Public Projects

Cost Terminology: Life Cycle Viewpoint, Past/Future Viewpoint, Cost Structure

12 Viewpoint, Fixed/Variable Viewpoint and Average/Marginal Viewpoint.

Final Exam 60%

Class/ tutorial Class is held ONE time per week in 50-minute lecture sessions.
Schedule There is also TWO times -50-minute weekly tutorial associated with this course. (1+2+0)
Class Attendance = 5% until to 25% Assignments
Grades
Quizzes = 10% Mid Term Exam = 20% Final Examination = 60% TOTAL = 100%
Prof. Magdy Zahw
Supervisor
Office# : B 212 Phone: 207 E_mail: magdy_zahw@cic-cairo.com