ECONOMICS 3308
ENGINEERING ECONOMIC ANALYSIS
SYLLABUS – FALL 2011
LECTURER:
OFFICE:
E-MAIL:
PHONE:
Mrs. Karen Johnson
Economics Department, HSB 354
Karen_Johnson@Baylor.edu
254-710-6149
OFFICE HOURS:
MWF 8:30-9:45 a.m.
MW 1:30-3:30 p.m.
and by appointment
TEXT
Thuesen and Fabrycky, Engineering Economy, Ninth Edition, Prentice Hall.
Additional reading: As a college student, you should be reading a daily newspaper on a regular basis.
Complimentary copies of local and national newspapers are available at various locations in the Business
School and across campus. I encourage you to take advantage of this—and please recycle!
PURPOSE OF THE COURSE
Engineering economy—what is it and why is it important? . . . Any engineering project must be
not only physically realizable but also economically feasible. The economic factors of a design
weigh heavily in the design process, and engineering economy is an integral part of that
process.
In broad terms, for an engineering design to be successful, it must be technically sound and
produce some benefits. The field of engineering economy is concerned with the systematic
evaluation of the particular benefits and costs of projects involving engineering design and
analysis. In other words, engineering economy quantifies the benefits and costs associated
with engineering projects to determine if they make (or save) enough money to warrant their
capital investments. (DeGarmo et al, p. xv)
The purpose of this course is to help you gain an understanding of the economic factors inherent in
engineering design and decision-making. You should leave this course equipped with a broader and
deeper knowledge of economic concepts and their applications, so that you can make well informed,
rational, and ultimately successful decisions in your future profession.
LEARNING GOALS
Throughout this semester, you should seek to:
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Build a rudimentary glossary of macroeconomic and microeconomic terms as they are introduced
during lectures and discussions
Become acquainted with basic economic concepts such as supply and demand, business cycles,
inflation and deflation, fiscal policy, monetary policy, etc.
Develop a significant understanding of the time value of money
Learn to use time value of money calculations and principles to analyze the desirability of given
investment alternatives
Increase your knowledge of the impact that interest and inflation have on economic and
engineering decisions
Understand the fundamentals of profit-and-loss analysis and benefit-cost analysis
Become familiar with basic accounting statements and concepts such as balance sheets, income
statements, depreciation methods, etc.
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DISTRIBUTION OF COURSE MATERIALS AND ANNOUNCEMENTS
Many of the course materials, including chapter outlines and homework assignments, will be available on
Blackboard (under Course Documents), while other materials can only be obtained by coming to class.
Announcements and reminders regarding assignments, due dates, review sessions, schedule changes, etc.,
will be made in class and/or via Blackboard. I encourage you to check Blackboard frequently.
It is your responsibility to determine that you have obtained all course materials and all information
distributed both in class and on Blackboard. Absence from class is not an acceptable excuse for failing
to have required materials or for failing to know about assignments, due dates, etc. On the contrary, if you
find it necessary to be absent from class at any time, you are expected to return to class with all required
materials and information in hand—no excuses, no exceptions. Begin by checking Blackboard for any
new postings. Then check with classmates to find out about additional in-class handouts or
announcements. Finally, contact me if needed before returning to class to obtain any materials or
information you missed.
Hint: If you find it necessary to be absent from class, please do not call, e-mail, or come by my office and
ask, “Did I miss anything?” OF COURSE you missed something! A much better approach would be: “I
know I missed a great deal when I was absent from class. I have done the readings, obtained the lecture
notes from a classmate, and checked Blackboard. May I also ________________ (fill in the blank: pick
up the handout I missed; verify the due date for the homework assignment; ask you to explain this
particular concept; etc.)?”
COURSE STRUCTURE—YOUR ROADMAP FOR NAVIGATING THE
SEMESTER

Textbook—Read it. In the schedule at the end of this syllabus you will find specific reading
assignments from the text. You will be expected to do the assigned reading prior to each class
meeting. I have also built into the schedule opportunities for you to re-read the chapters. This
schedule represents the very minimum recommended amount of reading. If you really want to
understand the material and do well in this course, you should plan to read all assigned material more
than once.

Outlines and Lectures—Read, listen, and take notes. My lectures are based on the chapter outlines
that I will post for you on Blackboard. You should print each outline when it becomes available, have
the outline beside you as you read the chapter, take notes into the outline, and then bring the outline to
class. As I talk about the material, you can follow along very easily if you have already read the text
and taken notes, and you can write down additional notes, examples, etc., that you hear in class to
further enhance your understanding.

Homework Assignments—A chance to apply your knowledge. I will provide homework
assignments for almost every chapter, each with an announced due date. These assignments are
excellent opportunities to see how well you are really understanding the material. After you have
worked through the assignment, you are welcome to bring your work by my office and I will check it
to be sure you have done it correctly. I encourage you to stay current on your homework. In this class
you will “learn by doing,” and your best opportunity to do this is by working the homework problems.

Chapter/Homework Quizzes—Treat these as mini-exams; they can really help your grade. I will
select six chapters or topics over which you will be quizzed. Each quiz will be worth 15 points. I
generally put at least one or two problems from the homework on each quiz—a chance to earn some
easy points. At the end of the semester I will count your five highest quiz grades toward your course
grade. Any score below 70% on a quiz should send you running to my office for help.
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
Review Sessions—An excellent way to supplement your own thorough exam preparation. I will
hold a review session prior to each major exam and prior to the final exam (barring any unforeseen
events that prevent me from doing so). Please schedule sufficient time preceding each exam to allow
you to take the fullest advantage of these sessions. If you are unable to attend the review sessions,
plan to come to my office during office hours for any needed help.

Major Exams—It’s up to you now! We will have two major exams (in addition to the final exam)
during the semester. Each exam will have two main parts: a set of multiple choice questions and a
section of work-out problems. My exams are tough, thorough, and detailed (kind of like me! ). You
need to prepare well for them; don’t just memorize—think, practice, and learn how to apply the
material. Any score below 70% on an exam should send you running to my office for help.

Final Exam—The epilogue. The final exam in this course will be comprehensive. It will be very
similar to the two other exams but longer, since the final exam period is two hours in length. Over the
years, I have found that for the vast majority of students the final exam has a fairly neutral effect on
their grades. With amazing frequency, students who go into the final with A averages make A’s or
high B’s on the final and end up with A’s for the semester. Likewise, students who have D’s going
into the final most often end up with D’s in the course. This is not to say that the final exam cannot
have an effect. Though not often, I have seen students do so well on the final exam that their averages
rise by a full letter grade. I have also seen things go the other way: students who perform very poorly
on the final can see their grades drop dramatically. My message here is this: Work hard throughout
the whole semester, make good grades on everything, and you’ll have little or nothing to fear from the
final exam. But if you perform poorly throughout the semester, thinking that you can salvage your
grade with the final exam, you are likely to be sorely disappointed.
POLICY REGARDING CELL PHONES, LAP TOPS, AND OTHER
ELECTRONIC DEVICES
In recent semesters it has become apparent to me that some students do not understand what constitutes
acceptable use of certain electronic devices in the classroom. Given the opportunity, those students will
frequently use their electronic devices during class in a manner that is distracting to themselves, to their
classmates, and to me. I am not willing to allow the learning environment in my classroom to be
negatively impacted by such behavior. Therefore, I will enforce certain rules about these devices in my
classroom. For example:

The use of lap top computers is not allowed in my class. Exception: If you have a documented
physical or learning disability and the use of a computer in the classroom (to be used only for taking
notes on the day’s lecture) is recommended as a reasonable accommodation to your situation, please
set up an appointment to meet with me so we can discuss this.

The use of cell phones is not allowed in my class. You may not use your cell phone as a clock or as a
calculator or for any other reason during class or during quizzes or exams. You will need to turn
your cell phone off or to silent before the beginning of class and leave your cell phone in your purse,
backpack, or pocket until the end of the class period. If you forget to turn off your cell phone and it
rings or vibrates during class, turn it off immediately without checking to see who is calling. At no
time during my class should your cell phone be visible, audible, or in use. I consider it a sign of
disrespect toward me, toward your classmates, and toward the importance of what we are doing in the
classroom for you to check your cell phone for message, use it to send or receive text messages, or in
any other way make use of your cell phone during class. Further, if your cell phone is visible or in use
during an exam or quiz, you will forfeit the right to finish the exam or quiz and I will treat the incident
as an honor code violation.

The use of iPods is not allowed in my class. If you have an iPod, it must be turned off and put away
during class and during quizzes and exams, and the ear buds must be removed from your ears.
I reserve the right to add new rules during the course of the semester if/when new instances of misuse of
electronic devices arise.
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GRADING AND RELATED POLICIES
THE HONOR CODE:
Students in my classes are expected to abide by Baylor University’s Honor Code in every respect. If you are not
familiar with the Honor Code, you should read it completely before coming to my class. You will find the Honor
Code at:
http://www.baylor.edu/honorcode/index.php?id=44060
The most pertinent sections are as follows:
THE HONOR CODE: Baylor University students, staff, and faculty shall act in academic matters with
the utmost honesty and integrity.
HONOR CODE VIOLATIONS: A Baylor University student violates the Honor Code if the student
engages in dishonorable conduct in connection with an academic matter.
DEFINITIONS OF TERMS AND EXAMPLES OF VIOLATIONS:
Academic matter means an activity that may affect a grade or in any way contribute toward the satisfaction
of the requirements for graduation . . . . Academic matters include, but are not limited to, the following
activities:

An examination.
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A research assignment or other activity to be done outside the class.
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Work that is in whole or partial satisfaction of requirements for the receipt of course credit for
participation.
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An activity for which course credit is given.
Dishonorable conduct means an act of academic dishonesty. The term dishonorable conduct includes, but
is not limited to, the following acts:

Offering for course credit as one's own work, in whole or in part, the work of another.

Using, during an examination period, material not authorized by the instructor giving the
examination.
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Giving, receiving, or obtaining information pertaining to an examination during an examination
period, unless such action is authorized by the instructor giving the examination.

Divulging the contents of an essay or objective examination designated by the instructor as an
examination not to be removed from the examination room or discussed.

Taking, without first reporting such fact to the appropriate faculty member, an examination about
which one has unauthorized information, even though such information was obtained
unintentionally.

Witnessing conduct which one knows or should reasonably know is dishonorable and failing to
report it as required by this Honor Code.
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GRADING AND RELATED POLICIES, continued
GRADING SCHEDULE:
As stated earlier, there will be two major exams during the semester, in addition to the final exam, which
is comprehensive. There will also be several quizzes given throughout the semester. Some of the
problems that will appear on the quizzes and exams will be taken directly from the assigned homework
problems. The grading schedule for the course is given below:
Exam I
Exam II
Final Exam
Quizzes
Total possible
100 points
100 points
150 points
__75 points
425 points
In order to earn an A in the course, the student must accumulate 382 points; for a B+, 370 points;
for a B, 340 points; for a C+, 327 points; for a C, 298 points; and for a D, 255 points.
I encourage you to keep a record of your grades in the following grid:
Ex1
Ex2
FE
Qz1
Qz2
Qz3
Qz4
Qz5
Qz6
EXAMS:
All exams must be taken at the regularly scheduled time; no makeup exams will be given. If you believe
you have a valid excuse for missing an exam, you must consult with me prior to the exam time. I am not
very lenient when it comes to accepting excuses for missing an exam; however, if I do accept your excuse
for missing the exam, the weight of that exam will be added to the weight of the final. (This arrangement
applies only one time during the semester.) If you do not obtain my approval for missing an exam, the
missed exam will earn a grade of zero.
Each exam must be completed within the allotted time; this includes the time needed to mark your
ScanTron form. Please do not ask me to give you additional time; I cannot do so.
Note that although I will drop your lowest quiz grade at the end of the semester, none of your exam
grades will be dropped, replaced with another exam grade, or otherwise adjusted.
QUIZZES:
There will be announced quizzes throughout the semester to encourage you to study regularly and to
provide you with feedback regarding your progress in the course. No makeup quizzes will be given, and a
missed quiz will earn a grade of zero.
Each quiz must be completed within the allotted time. Please do not ask me to give you additional time; I
cannot do so.
At the end of the semester I will drop your lowest quiz grade. This provision is intended to give you a
“free pass” on one quiz. Thus, if you miss or score poorly on one quiz, it will not impact your grade.
Please use your “free pass” wisely.
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GRADING AND RELATED POLICIES, continued
HOMEWORK:
There will be reading and homework assignments given, with specific due dates. (Please note that your
daily reading assignments are considered “homework” to be completed for each class period. The
readings are a critical component of your class preparation; they are not optional.) The homework is
designed to help you “practice” what you have learned in class and from your reading.
Your homework efforts will not receive a grade per se. However, as stated earlier, the purpose of the
homework is to help you “learn by doing.” You will be rewarded for the effort put forth on your
homework by seeing some of the same problems on the quizzes and exams. You should also be aware
that I consider the effort you put into your homework to be a significant measure of your interest in this
class and of your desire to do well in the course. Conversely, failure to stay current on your homework
assignments will be viewed as indicating indifference toward the course material and your grade. At
the end of the semester I will take into account what I know about your homework efforts in making my
grade decisions.
EXTRA CREDIT:
Please note that no extra credit is mentioned in this grading schedule. There will be none. There are
numerous opportunities (two major exams, the final exam, and quizzes) for you to demonstrate your
knowledge. Make the best of each opportunity. There are no “do-overs,” re-tests, or other second
chances. You have been given the grading schedule in this syllabus and you know how many points you
must earn to receive any given grade.
ATTENDANCE AND PUNCTUALITY POLICIES
You must attend 75 percent of all class sessions for this course in order to receive credit in accordance
with the attendance policy of the Hankamer School of Business. This means that 11 absences will be
allowed in a MWF class; 12 will be excessive. For TR classes, 7 absences will be allowed; 8 will be
excessive. You will earn an automatic F if you exceed the permitted number of absences. Although you
are “allowed” a certain number of absences, I strongly encourage you to maintain an excellent attendance
record. I cannot, of course, guarantee that excellent attendance will allow you to earn a high grade in this
course, but I can assure you that poor attendance will most likely result in your earning a low grade.
If you are tardy, you already will have been marked absent when you arrive. It will be your responsibility
to take time after class to have the roll changed in order to be counted present. The absence mark will be
changed to a tardy mark; 2 tardies will count as an absence. An absence mark not changed before leaving
class on the day in question will remain as an absence. You may check with me throughout the semester
to determine your absence/tardy record; it is ultimately your responsibility to know where you stand
regarding your attendance record in relation to the required attendance policy.
Although you will not receive credit or “points” for attendance, you should know that I consider
attendance and punctuality to be significant measures of your interest in this class and of your desire to
do well in the course. Conversely, poor attendance and/or tardiness will be viewed as indicating
indifference toward the course material and your grade. Be aware that at the end of the semester I will
look closely at your attendance and punctuality in making my grade decisions.
Being present in mind and in body: Please show respect for me, for your classmates, and for yourself by
bringing your mind (your attention, wakefulness, etc.) as well as your body to my class. You may not
intend to show disrespect or rudeness when you work on other material, read the newspaper, or do other
things besides focusing on economics in my class. I do consider such behavior to be disrespectful. You
have the right to expect me to give my best effort to this class; likewise, I expect your best effort at all
times. Thank you.
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SPECIAL “HOUSEKEEPING” INSTRUCTIONS
Food and drinks (with the exception of water) are not permitted in the classrooms in the Business School.
Our Dean has explicitly instructed all faculty to enforce this rule. Please dispose of all food and drink
before entering the room or I will have to remind you to do so.
SUMMARY OF COURSE COVERAGE
The following topics will be covered during the semester:
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Engineering and Engineering Economy
Some Economic and Cost Concepts
Interest Formulas
Calculations of Economic Equivalence
Equivalence Involving Inflation
Bases for Comparison of Alternatives
EXAM I
Chapter 7
Chapter 9
Chapter 8
Chapter 10
Chapter 11
Chapter 12
Decision Making Among Alternatives
Evaluating Replacement Alternatives
Evaluating Production Operations
Evaluating Public Activities
Accounting and Depreciation Accounting
Income Taxes in Economic Analysis
EXAM II
Unit on Personal Finance
FINAL EXAM
10:10 MWF class – Monday, December 12, 9:00-11:00 a.m.
11:15 MWF class – Thursday, December 8, 2:00-4:00 p.m.
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TENTATIVE SCHEDULE:
DATE
Mon., Aug. 22
TO BE
COVERED IN
CLASS
Intro. to course
READING ASSIGNMENT (to be completed before class)
The syllabus
Wed., Aug. 24
Chapter 1
All of Chapter 1 (quick read-through)
Fri., Aug. 26
Chapter 2
All of Chapter 2
Mon., Aug. 29
Chapter 3
Sections 3.1, 3.2
Wed., Aug. 31
Chapter 3
Section 3.3
*Omit sections 3.3.7 and 3.3.8
*Omit section 3.4, except for the 1st, 2nd, 3rd, and 5th formulas on p. 54
*Omit section 3.5.1 and use the method taught in class
*Omit from section 3.5.2 to the end of the chapter
Fri., Sept. 2
Chapter 3
Mon., Sept. 5
LABOR DAY
Re-read chapters as needed; catch up on readings and homework if you
are behind. 
No class
Wed., Sept. 7
Chapter 4
Sections 4.5, 4.1, 4.2
*Omit all references to continuous compounding, such as from middle of p.78 to near top of p. 79
*Omit sections 4.2.7 and 4.2.8 on pp. 80-81
*Omit from top of p. 91 to end of section 4.5.3 on p. 93
Fri., Sept. 9
Chapter 4
Sections 4.3, 4.4
*Omit all references to gradients, such as from middle of p. 83 to middle of p. 84
Mon., Sept. 12
Chapter 4
Sections 4.6, 4.7
*Omit section 4.7.3
*Omit section 4.8
Wed., Sept. 14
Chapter 4
Fri., Sept. 16
Chapter 5
Re-read chapters as needed; catch up on readings and homework if you
are behind. 
Sections 5.1, 5.2
*Omit section 5.2.2 on pp. 121-123
Mon., Sept. 19
Chapter 5
Sections 5.3, 5.4
*Omit section 5.4.2 on pp. 133-134
Wed., Sept. 21
Chapter 5
Fri., Sept. 23
Chapter 6
Re-read chapters as needed; catch up on readings and homework if you
are behind. 
Sections 6.1, 6.2, 6.3, 6.4
*Omit sections 6.4.2 and 6.4.3 on pp. 159-161
*Omit from second paragraph on p. 163 through end of section 6.4.4
*Omit section 6.4.5
Mon., Sept. 26
Chapter 6
Sections 6.5, 6.6
Wed., Sept. 28
Chapter 6
Section 6.7
*Omit section 6.8
8
Fri., Sept. 30
Chapter 6
Mon., Oct. 3
Chapter 6
Re-read chapters as needed; catch up on readings and homework if you
are behind. 
Serious preparation for Exam I should be underway already! Re-read
chapters, review outlines, rework quizzes and homework problems, and
attend office hours and review session in preparation for the exam.
Tues., Oct. 4
Review session
4:00-5:30 p.m. in Cashion 309
Wed., Oct. 5
EXAM I
Fri., Oct. 7
Chapter 7
Sections 7.1, 7.2, 7.6
*Omit from last paragraph on p. 195 to end of section 7.2 on p. 197
*Omit the first third of p. 211
Mon., Oct. 10
Chapter 7
Sections 7.3, 7.4
Wed., Oct. 12
Chapter 7
Sections 7.5, 7.7
*Omit from middle of p. 208 to end of section 7.5 on p. 209
*Omit from third paragraph on p. 216 to end of section 7.7 on p. 225
Fri., Oct. 14
FALL BREAK
No class
Mon., Oct. 17
Chapter 9
Sections 9.1, 9.2, 9.3
*Omit sections 9.4, 9.5, 9.6, and 9.7
Wed., Oct. 19
Chapter 9
Fri., Oct. 21
Chapter 8
Re-read chapters as needed; catch up on readings and homework if you
are behind. 
Section 8.1
*Omit sections 8.2, 8.3, 8.4, and 8.5
Mon., Oct. 24
Chapter 8
Study the material in the chapter outline
Wed., Oct. 26
Chapter 10
Sections 10.1, 10.2, 10.3, 10.4
Fri., Oct. 28
Chapter 10
Sections 10.5, 10.6
*Omit from middle of p. 360 to bottom of p. 362
*Omit section 10.7
Mon., Oct. 31
Chapter 11
Sections 11.1, 11.2, 11.3
Wed., Nov. 2
Chapter 11
Sections 11.4, 11.5
*Omit section 11.5.3
Fri., Nov. 4
Chapter 11
Sections 11.6, 11.7, 11.8
*Omit sections 11.6.2 and 11.6.3. (Do look at Table 11.7 on p. 409.)
Mon., Nov. 7
Chapter 11
Wed., Nov. 9
Chapter 12
Re-read chapters as needed; catch up on readings and homework if you
are behind. 
Sections 12.1, 12.2
*Omit section 12.3
Fri., Nov. 11
Chapter 12
Sections 12.4, 12.5, 12.6
9
Mon., Nov. 14
Chapter 12
Sections 12.8, 12.9
*Omit sections 12.7, 12.10, 12.11, 12.12, and 12.13
Wed., Nov. 16
Chapter 12
Serious preparation for Exam II should be underway already! Re-read
chapters, review outlines, rework quizzes and homework problems, and
attend office hours and review session in preparation for the exam.
Thurs., Nov. 17
Review session
4:00-5:30 p.m. in Cashion 309
Fri., Nov. 18
EXAM II
Mon., Nov. 21
Personal finance
Readings to be assigned
Wed., Nov. 23
& Fri., Nov. 25
Mon., Nov. 28
THANKSGIVING
HOLIDAY
Personal finance
No class
Wed., Nov. 30
Personal finance
Readings to be assigned
Fri., Dec. 2
Talk about the
final exam; do
course evaluations
Important information will be provided to help you prepare for the final exam;
attendance in class is critical. Also think about what you want to say on the
course evaluations—comments about what you think was positive or helpful as
well as recommendations for changes or improvements.
Mon., Dec. 5
Last class day—
wrap-up
Study days
Tues., Dec. 6 &
Wed., Dec. 7
Wed., Dec. 7
Readings to be assigned
Serious preparation for the Final Exam should be underway already! Reread chapters, review outlines, rework quizzes and homework problems,
and attend office hours and review session in preparation for the exam.
Review session
3:30-5:00 p.m. in Cashion 309
FINAL EXAM
10:10 MWF class: Your final exam is on Monday, Dec. 12, 9:00-11:00 a.m.
11:15 MWF class: Your final exam is on Thursday, Dec. 8, 2:00-4:00 p.m.
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