Economics for Engineers (Humanities-II) (HSMC 301)
4 units: Economic decision making, Cash flow, interest and equivalence, Inflation and price change, Depreciation · L-T-P 3L/week.
Detailed syllabus
Unit 1: Economic decision making (9 hours)
Economic decision making: overview, problems, role, decision-making process. Engineering costs and estimation: fixed, variable, marginal and average costs, sunk and opportunity costs, recurring and non-recurring costs, incremental costs, cash vs. book costs, life-cycle costs; types of estimate, estimating models (per-unit, segmenting, cost indexes, power-sizing), improvement and learning curve.
Unit 2: Cash flow, interest and equivalence (9 hours)
Cash flow, interest and equivalence: cash-flow diagrams, time value of money, debt repayment, nominal and effective interest. Cash flow and rate of return analysis: salvage value, annual cash-flow analysis, internal rate of return, incremental analysis, future worth, benefit-cost ratio, sensitivity and breakeven analysis; economic analysis in the public sector.
Unit 3: Inflation and price change (9 hours)
Inflation and price change: causes, effects, price indexes and their use in engineering economic analysis. Present worth analysis: end-of-year convention, borrowed-money viewpoint, effect of inflation and deflation, taxes, multiple alternatives. Uncertainty in future events: estimates, probability, expected value, economic decision trees, risk vs. return, simulation, real options.
Unit 4: Depreciation (9 hours)
Depreciation: deterioration and obsolescence, depreciation calculation and capital allowance methods (straight-line, declining balance), tax regulations. Replacement analysis: decision map, minimum cost life of a new asset, marginal cost. Accounting: balance sheet, income statement, financial ratios, cost accounting, direct and indirect costs, indirect cost allocation.
Source: official document