307675

Engineering Economics 401

Mr Paul Azzalini
Faculty of Engineering
Curtin Engineering

UNIT OUTLINE
Semester 2 2009

CRICOS (Perth - 00301J) (Sydney - 02637B)

307675 Engineering Economics 401

Table of Contents
INTRODUCTION ............................................................................................................................. 1 ESSENTIAL ADMINISTRATIVE INFORMATION ........................................................................... 1 TEACHING STAFF.......................................................................................................................... 2 UNIT COORDINATOR .................................................................................................................... 2 UNIT SYLLABUS............................................................................................................................. 2 LEARNING OUTCOMES ................................................................................................................ 3 LEARNING ACTIVITIES.................................................................................................................. 3 STUDENT FEEDBACK ................................................................................................................... 3 LEARNING RESOURCES .............................................................................................................. 3 TEXT BOOK .................................................................................................................................... 3 Recommended Texts:.................................................................................................................. 4 ASSESSMENT DETAILS ................................................................................................................ 4 Assessment Summary ................................................................................................................. 4 Assessment Task Details............................................................................................................. 4 Supplementary and Deferred Assessments ................................................................................ 4 Referencing Style......................................................................................................................... 4 Awarding of Grades ..................................................................................................................... 4 STUDENTS RIGHTS AND RESPONSIBILITIES ........................................................................... 5 ADDITIONAL INFORMATION......................................................................................................... 5 Telephone Contacts:.................................................................................................................... 5 UNIT STUDY CALENDAR .............................................................................................................. 6 Semester 2 2009 ...................................................................................................................... 6

307675 Engineering Economics 401

INTRODUCTION
Welcome to Curtin Engineering. The School of Engineering at Curtin aspires to be nationally and internationally recognised as a leader in Engineering education and research. We are dedicated to the enhancement of teaching and research and the pursuit of excellence and innovative applications of engineering technology as a contribution to the advancement of scientific knowledge, understanding and community relevance.

ESSENTIAL ADMINISTRATIVE INFORMATION

Unit Title Unit Study Package Number Unit Coordinator Teaching Area Credit Value Mode(s) of study Pre-requisites Co-Requisites Anti-requisites Additional requirements Core Unit Core Unit status Engineering Economics 401 307675 Mr Paul Azzalini Faculty of Engineering 12.5 Supplemental None. None. None. None. Bachelor of Engineering If you are taking this unit as a required (core) unit in your course of study, you may be terminated from your course of study if you fail this unit twice. This is a grade/mark unit. All fee information can be obtained through the Fees Centre. Visit http://www.fees.curtin.edu.au/index.cfm for details.

Result Type Ancillary Fees and Charges Unit Website Faculty or School Website Tuition Pattern

http://www.fac.eng.curtin.edu.au/home/index.cfm One x 1 hour lecture. One x 1 hour tutorial.

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TEACHING STAFF
The lecturer or tutor for this unit and their contact details are below: Your lecturer or tutor: Email: Phone: Building: Room: Contact Hours: Mr Paul Azzalini paul.azzalin@parkeng.com.au 9266 2844 300 217 TBA

The teaching staff will assist you with your learning and any problems or difficulties you may be experiencing while undertaking this unit. They will also mark your assignments and provide feedback in relation to your progress in this unit.

UNIT COORDINATOR
Every unit also has a person who is responsible for the overall administration of that unit. This person is the Unit Coordinator. If you cannot contact the person who is teaching you (named above) or if you have further queries about this unit, you may wish to contact the Unit Coordinator for this unit. Their contact details are below: Unit Coordinator: Email: Phone: Building: Room: Contact Hours: Mr Paul Azzalini paul.azzalin@parkeng.com.au 9266 2844 300 217 TBA

UNIT SYLLABUS
Analysis of the financial effects of engineering decisions by estimating and comparing the costand concept of time value of money. The projection of future cash flows of revenues and expenses. Computations of rates of return. The selection of appropriate investment assessment methods such as present value. The internal rate of return, and economic value added. The treatment of various cash flows. Depreciation and taxes.

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Direct and indirect costs. The analysis and management of risk. The analysis of financial statements and financing alternatives to pay for proposed engineering projects.

LEARNING OUTCOMES
On successful completion of this unit you will be able to: 1. 2. 3. 4. 5. Basic understanding of business finance and economics as it relates to the discipline of engineering Demonstrate how to take into account time value of money, inflation, taxes and depreciation in financial analysis Reveal how to correctly manipulate and evaluate cash flows for the purpose of engineering economic analysis Interpret the results of engineering economic analysis, compare financial alternatives and make appropriate decisions / recommendations Illustrate how to support assumptions, accept the corresponding risk associated and deal with uncertainty

LEARNING ACTIVITIES
One x 1 hour lecture. One x 1 hour tutorial.

STUDENT FEEDBACK
For Semester 1 and Semester 2 eVALUate is open for student feedback: 11 May - 21 June Semester 1 12 October - 22 November in Semester 2 For other study periods see http://evaluate.curtin.edu.au/info/dates_2009.cfm We welcome your feedback as one way to keep improving this unit. Later this semester, you will be encouraged to give unit feedback through eVALUate, Curtins online student feedback system (see http://evaluate.curtin.edu.au).

LEARNING RESOURCES
None.

TEXT BOOK
You will need to purchase the following textbook in order to complete this unit: Fundamentals of Engineering Economics, Park, C.S., Prentice-Hall, 2004 (FEE)

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Recommended Texts:
You do not have to purchase the following textbooks but you may like to refer to them. None.

ASSESSMENT DETAILS
Assessment Summary
The assessment for this unit consists of the following items. Assessment Tasks Mid-Semester Examination Final Examination TOTAL Week Due Worth 35 65 100%

Assessment Task Details

Mid Semester Test and Final Examination .

Supplementary and Deferred Assessments

Students granted a Supplementary or Deferred assessment will be notified via OCC. Supplementary and Deferred assessments will be held on Wednesday 17th, Thursday 18th and Friday 19th February 2010. Please also note that the failure to attend the examination/assessment on the day and time set will result in a fail for the unit. Under no circumstances will alternative arrangements be made to suit individuals.

Referencing Style
Curtin Engineering advises students that Curtin University supports the "Chicago Referencing Style" for written work and oral presentations. For a guide to this style please see http://library.curtin.edu.au/referencing/index.html However, students are permitted to use other recognised styles that appear in the Engineering literature. Note also that individual lecturers can stipulate that a particular style is used when it best matches the type of work in the assessment of the particular unit.

Awarding of Grades
To pass this unit you must: Achieve a grade/mark greater than or equal to 5/50. Submit all assessments. Pass all assessment activities. Pass the exam. Any talking or cheating during the MST or Final Exam will automatically lead to zero marks being awarded for that assessment.

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STUDENTS RIGHTS AND RESPONSIBILITIES

It is the responsibility of every student to be aware of all relevant legislation, policies and procedures relating to their rights and responsibilities as a student. These include: the Student Charter, the Universitys Guiding Ethical Principles, the Universitys policy and statements on plagiarism and academic integrity, copyright principles and responsibilities, the Universitys policies on appropriate use of software and computer facilities, students responsibility to check enrolment, deadlines, appeals, and grievance resolution, student feedback, other policies and procedures electronic communication with students

See www.students.curtin.edu.au/administration/responsibilities.cfm for comprehensive information on all of the above.

ADDITIONAL INFORMATION
Telephone Contacts:
If you have a query relating to administrative matters such as: requests for deferment of study difficulties with accessing online study materials obtaining assessment results

please contact your Unit Coordinator: Unit Coordinator: Email: Phone: Building: Room: Contact Hours: Mr Paul Azzalini paul.azzalin@parkeng.com.au 9266 2844 300 217 TBA

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UNIT STUDY CALENDAR

If you have a printed copy of this document, you may like to tear off this final page and keep the Study Calendar handy as you work through the unit.

Semester 2 2009
WK Description FEE Chapter
No tutorial 13 No tutorial

Tutorials

1.

Introduction Making Sense of Financial Statements P&L, Balance Sheet and Cashflow Financial Ratios Understanding Cost Behaviour Fixed, Variable and Average Costs Break-even points Cost Drivers Time Value of Money Present and Future Value Annuities Perpetuity and Composite Cashflow

2.

3.

Chap 3 in CEE (handed out in class)

13.3(a); 13.4(a) to (d); 13.5(a) to (d) & (h) to (i); 13.6(a) to (d) & (h) to (i)

CEE: 3.2; 3.4; 3.8(b); 3.9; 3.10; 3.11; 3.12(a), (c) & (d)

4.

Tuition Free Week

Money Management & Inflation Nominal Vs Effective Interest Rates Discrete and Continuous Compounding Compound Annual Growth Rate (CAGR) Inflation in Project Cashflows Mid-Semester Test in lecture 3&4 2.4; 2.5; 2.8; 2.12; 2.16; 2.20; 2.21; 2.24; 2.27; 2.47; 2.52

5.

6.

3.2; 3.11; 3.12; 3.17; 3.21; 3.25; 3.36; 4.2; 4.4; 4.5; 4.7; 4.12; 4.14; 4.16(a) Note that there will be no tutorial given for this week, but please ensure you understand the answers provided as this topic will be included in the Mid Semester Test 5&7 Review of Mid Semester Test

7.

Present Worth Analysis Payback Period NPV IRR Annual Worth Analysis Calculating unit-profit / unit-cost

8.

5.1; 5.2; 5.11; 5.27; 5.40; 5.42; 5.45; 7.7(a) & (b); 7.12; 7.19

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WK

Description

FEE Chapter Tuition Free Week

Tutorials

9.

Accounting for Depreciation and Taxes What is Depreciation and why do we have it? Depreciation Methods Accounting profits Marginal and Corporate Taxes Cost of Capital Cost of Debt and Cost of Equity WACC Funding Cost Projects Under Uncertainty Sensitivity Analysis Decision Trees Final Review

6.2; 6.6; 6.10; 6.14; 6.16; 6.18; 6.23; 6.25; 6.26; 6.27

8.6; 8.7; 8.11; 8.14; 8.15; 8.28; 8.31 plus others handed out

10.

9.48; 9.49; 9.50; 9.51 plus others handed out

11.

12.

10

To Be Advised

Study Week Examinations Examinations

END OF UNIT OUTLINE

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