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Abbottabad Campus
COURSE OUTLINE
ENGINEERING ECONOMICS
Course Code: ECO300
Course Objective
Engineering management relies on the knowledge of engineering economics to be able to
evaluate projects from a financial perspective. Optimizing financial performance of a project
is a key responsibility of the engineer in the decision making process. The basic concepts of
the time value of money and economic equivalence is applied throughout the course. Each
engineering problem/project progressively incorporates different cash flows, the cost of
funds, capital, operational and maintenance costs, salvage value, depreciation, amortization,
and taxation. Students learn to apply different economic analysis methods – like present
worth, annual-equivalent worth, rate-of-return, life-cycle cost, cost/benefit etc – in
evaluating the economic viability of a project, as well as the comparison of mutually
exclusive alternatives. The course also introduces concepts of replacement decisions, capital-
budgeting decisions, and project risk and uncertainty.
Recommended Books
Engineering Economy by William G Sullivan, Elin M. Wicks and C. Patrick Koelling, 16 th Edition
Contemporary Engineering Economics by Chan S Park, 4th Edition.
WEEKLY SCHEDULE
Week Tentative Topics
Week 1 Introduction to Engineering Economy
Week 2 Cost Concepts and Design Economics
Week 3 Cost-Estimation Techniques
Week 4 The Time Value of Money
Week 5 Evaluating a Single Project
Week 6 & 7 Comparison and Selection among Alternatives
Week 8 Depreciation and Income Taxes
Week 9 Evaluating Projects with the Benefit–Cost Ratio Method
MARKS DISTRIBUTION
Assignments (4 Minimum) 10 % weightage
Quizzes (4 Minimum) 15 % weightage
st
1 Sessional Exam 10 % weightage
2nd Sessional Exam 15 % weightage
Terminal Exam 50 % weightage
Total 100 %