Inter American University of Puerto Rico
Bayamón Campus
School of Engineering
Industrial Engineering Department
Catalog
Description
Pre-requisite
Textbook
Syllabus
ENGR3300 – Engineering Economy
Required
Criteria and techniques for economic analyses related to the decision-making process in engineering projects where time and money are important. Includes discounted cash flows, alternative comparisons by equivalent annual costs, present net worth, and rate of return on investment (ROI).
Analysis of break-even points, depreciation; effect of income tax rates, equipment replacement; risk and sensitivity analysis.
ENGR 3200
Park, C. S., Fundamentals of Engineering Economics, Second ed., Prentice-Hall, 2008. ISBN: 0-13-
220960-8

References
Topics Covered i
Sullivan, G.W., Wicks, E.M., Luxhoj, J. Engineering Economy.13
th Edition, Prentice
Hall, 2005. ISBN: 0131486497.
Park, C. S., Contemporary Engineering Economics, 3rd ed., Prentice-Hall, 2002. ISBN:
0-13-089310-2.
Newman, D.G. and Lavelle, J.P., Engineering Economic Analysis, Ninth Edition,
Oxford, 2004. ISBN: 0195168070.
Eschenbach, Ted. Engineering Economic – Applying Theory to Practice, 2 nd Edition,
Oxford, 2003. ISBN: 0195161521.
Upon successful completion of the course, the student should be able to:
1.
Explain the principles of economic equivalence, simple and compounded interest, time value of money; analysis of single and multiple investments.
2. Formulate and solve time value of money problems.
3. Evaluate multiple alternatives to determine the best one for engineering projects on both private and public sector.
4. Assess the impact of depreciation, taxation and other economic factors on projects' feasibility.
5. Conduct risk and sensitivity analysis on key compounding parameters.
Topics
1. Introduction the Decisions-making Process
Hrs
2
2. Interest and Equivalence: Time Value of Money, Simple Interest, Equivalence, Single 4
Payment Compounded Interest
3. More Interest Formulas: Uniform Series, Arithmetic Gradient, Geometric Gradient, 4
Nominal and Effective Interest
4. Present Worth Analysis 3
5. Annual Cash Flow Analysis 3

6. Rate of Return Analysis 2
7. Incremental Analysis and Rational Capital using Rate of Return
8. Other Analysis Techniques: Future Worth Analysis, Benefit-Cost Analysis, Payback
3
3
Period
9. Depreciation 3
10. Income Taxes 3
11. Replacement Analysis 3
12. Engineering Cost and Cost Estimation 2
13. Inflation and Deflation 2
15. Open 2
Class/Lab
Schedule:
Suggested
Evaluation
Strategies:
Contribution of
Course to Meeting
Professional
Component
Three credit hours. Forty five-hour lecture per term.
1.
Exams (65%): Two partial exams (20% each) and a final exam (25%) will be scheduled early in the semester. You are expected to take the exams at the times and dates specified. All exams missed without making prior arrangements will be recorded as a zero.
2.
Homework and quizzes, participation (15%): Numerous homework assignments will be given to aid students in understanding the material. Any homework not handed in by the individual in class will be recorded as a zero. Each student must work individually but team work is also encouraged for challenging problems.
3.
Homework – Excel (10%): Students may use any software system they are comfortable with to solve the homework problems. Excel may also be used for assignments.
4.
Case study (10%): Formalization of case studies. One or two mini-cases will be assigned to be done in groups or as individuals. The mini-cases include a list of questions that are to be answered, with the answers presented in a report intended for decision makers. The report should include: background information on the mini-case, a description of the problem or situation to be addressed, assumptions that are made to solve the mini-case, the analysis you perform to solve the mini-case answers to the questions, your results and recommendations.
Three credit hours of engineering science and no credit hours of engineering design.

Relationship of
Course to Program
A B
√
Outcomes
Supporting Services or Special Needs
C
√
D E
√
F G H I J K
√
Students requiring additional services or special assistance must request these at the beginning of the course or as soon as they learn that they need them, through the appropriate register with the Coordinator of Students with Disabilities at the
Dean of Students office.
Honesty, Fraud and Plagiarism (General Student Regulations, Chapter V)
The lack of honesty, fraud, plagiarism and any other inadequate behavior in relation to academic work constitute major infractions sanctioned by General Student Regulations. Major infractions, according to General Regulation Students, may result in suspension from the University for a definite period of time greater than one year or the permanent expulsion from the University, among others sanctions.
Prepared by:
Reinaldo Cintrón, PhD, PE
Revised by: Catherine Aguilar, MEIE i
Schedule, lecture, and laboratory topics are subject to change.