FEDERAL URDU UNIVERSITY OF ARTS SCIENCE AND TECHNOLOGY,

ISLAMABAD
Fall 2009
Faculty of Engineering
Department of Electrical Engineering
Course Information
Course Title: Engineering Economics
Credit Hrs:
3+0
Prerequisites:
None
This course is prerequisite for:
N/A
Instructor: Khalid Mahmood (Visiting faculty)
Email:
khalidm57@yahoo.com
Lecture timings: Tue & Fri
(1330-1500 Hrs)
Text Books: None

Reference Books:
1. Engineering Economy, A. Tarquin, (Latest Edition)
2. Engineering Economy, Degarmo (Latest Edition)
3. Economics, Samaulson, (Latest Edition)
Course Objective:

The objective of the course is to create awareness amongst the students

about the economic considerations involved in engineering. For this purpose,
the syllabus has been downloaded from the HEC website so that all requisite
topics are covered in the class room during the semester.
Weekly Lecture Breakdown:
Week
1

Main Topic

Introduction

Economic
Environment
3

Elementary
Financial Analysis

Sub Topics

Basic concept and principles of Economics,

Economic growth and models, the problems of
scarcity. Concept of Engineering Economy.
Consumer and producer goods, goods and services,
demand & supply concept. Equilibrium, elasticity of
demand, elasticity of supply, measures of Economic
worth. Price-supply-demand relationship.
Theory of production, factors of production, laws of
returns, break-even charts and relationships.
Perfect competition, monopoly, monopolistic
competition and oligopoly, Fundamentals of
Marketing
Basic accounting equation. Development and
interpretation of financial statement-Income
statement, Balance sheet and cash flow. Working
capital management
Balance Sheet Problems

Break Even
Analysis

Selection Between
Alternatives

Investment
philosophy

10

Value Analysis/
Value Engineering

Revenue/cost terminologies, behaviour of costs.

Determination of costs/revenues. Numerical and
graphical presentations.
Practical applications. BEA as a management tool
for achieving financial/operation efficiency.
Time value of money and financial internal rate of
return. Present value, future value and annuities.
Cost-benefit analysis, selection amongst materials,
techniques, design.
Investment alternatives having identical lives.
Alternatives having different lives. Make or buy
decisions and replacement decisions.
Value analysis procedures. Value engineering
procedures. Value analysis versus value
engineering. Advantages and applications in
different areas.

11

Value analysis in designing and purchasing.

12

Mathematical statement of linear programming

problems, graphic solution simplex procedure.
Duality problem.

Linear
Programming

13
14

15

16

Practice Linear Programming problems

Depreciation and
Taxes

Depreciation concept, economic life, methods of

depreciations, profit and returns on capital,
productivity of capital gain (loss) on the disposal of
an asset, depreciation as a tax shield.

Business
Organizations

Type of ownership, single ownership, partnerships,

corporation, type of stocks and joint stock
companies banking and specialized credit
institutions.

Capital Financing &

Allocation

Capital budgeting, allocation of capital among

independent projects, financing with debt capital,
financing with equity capital trading on equity,
financial leveraging.

Grading criteria:
Quizzes:
Assignments:
Mid-Term:
Finals:
Attendance:

10
10
30
50
75

%
%
% (must pass)
% (must pass)
% minimum