Tabla de Contenidos

**Course code number and name:**300IGI003, Engineering Economics.**Credits and contact hours:**3 credit hours, 4 hours per week**Course coordinator:**Jorge Enrique Álvarez; John Wilmer Escobar**Prerequisites:**100 approved credit hours.**Type of course:**Required

- Fundamentals of Engineering Economics, 2nd Edition; C.S. Park, 2009.
- Engineering Economics, 6th Edition; L. Blank, A. Tarquin, 2006.

This course is focused on the fundamental principles of the evaluation of engineering projects and on the analysis of decisions related to capital investment, cost estimation, finance mathematics and decision under risk and uncertainty.

- To identify the fundamental concepts, terminology and notation of engineering economics.
- To apply the criteria of economic decision to compare alternatives of capital investment.
- To identify the methods of economic evaluation of investment alternatives in the public sector.
- To calculate the cash flow of an investment project.
- To evaluate investment projects under risk and uncertainty.

Student Outcomes | |||||||||||
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A | B | C | D | E | F | G | H | I | J | K | |

Relevance | 2 | 2 | 3 | 2 | 2 | 3 | 3 |

1: low relevance; 2: medium relevance; 3: high relevance.

- Engineering economics for decision making.
- Interest rates and return rates, simple interest, and compound interest.
- Minimum attractive return rate.
- Linear series, geometrical series.
- Nominal and effective interest rates.
- Independent projects, mutually excluding projects, types of investment alternatives.
- Analysis of net present value, capitalized costs.
- Analysis of equivalent annual value, capital costs, operating costs.
- Analysis of return rate, return on investment, return on invested capital.
- Economic evaluation of public sector projects.
- Inflationary effects.
- Costs categories, breakeven pint, cash flows before taxes, cash flows after taxes.
- Methods to describe the risk of a project, sensitivity analysis for mutually excluding alternatives, probabilistic approach.