Prerequisites:
Text: - Course
IENG 577 ADVANCED ENGINEERING ECONOMY
SPRING 2008
IMSE 377 or equivalent, or instructor consent
ADVANCED ENGINEERING ECONOMICS
Chan S. Park and Gunter P. Sharp-Bette, 1990
John Wiley and Sons
Notes:
Accounting & Costing Fundamentals, Dr. L. T. Moore(check your e-mail)
Skills and Knowledge of Cost Engineering, 3rd. Edition
Instructor:
Dr. Robert C. Creese, CCE
359-D MER Building
293-4607-ext-3711
e-mail robert.creese@mail.wvu.edu
Topic
Introduction, Accounting & Costing Fundamentals
Purcell Diagrams, Financial Flows
Week
1
Assignment Due Friday of week
Notes: T-Account Problems
pages 18-22
2
Accounting & Cash Flows
T-Account Problems p 43-49, Chapter 1-1,3-6
Research Project Assignment & Team Formation- Jan 22
3
Engineering Economy Review
Chapter 2-1,3,5,9, 10,15,19,20,
23(modified to Table 2.7 & 40%)
4
Engineering Economy Review
How to Depreciate Property – IRS Pub 946
Initial Research Paper Bibliography Due-Feb 5
Chapter 2-6, Chapter 4-2,10,11
http://www.irs.gov/pub/irs-pdf/p946.pdf
5
Engineering Economy Review
Chapter 4-16,22, Derive MACRS schedule for a 4 year life
6
Modeling & Transformation Techniques
Detailed Paper Outline Due Feb 21
Chapter3-2(cash flow 2 only), 4,5
7
Measures of Investment Worth – Single Project
Chapter 6-1,7 + assigned Problem
8
Midterm March 4
9
Project & Cost Control
S&K notes, Ch9 1-5
10
Project & Cost Control
Draft of 1st 3rd of Research Paper Due-March 13
S&K notes, Ch13-Risk Problem
11
Capital Budgeting Models(Chapter 8)
Assigned Problems
12
Capital Budgeting Models(Planning Horizons)
Draft Research Paper Due – April 8
Chapter 8-4(budget of $ 15,000 instead of $ 13,000), 8-12
13
Final Research Paper Due-April 17
Prepare Presentation
14
Research Paper Presentations – Start April 22
15
Course Evaluations, Review, Make-up
16
May 7th , 15:00-17:00 Final Exam
Evaluation & Grading
Evaluation
Midterm Exam 25%
Research Paper 35%
Final Exam
40%
IMSE 577 Spring 2008
Grading
A > 90%
90 > B > 80%
80 > C > 70%
70 > D > 60%
F < 60%
1
No hats will be worn in class except for religious or health reasons. No eating in the classroom.
A grade of zero will be assigned for any exam for which prior arrangements have not been made. Make-up tests will generally
precede regular scheduled exams.
Homework is to be done on Engineering Paper, quadrille paper or as a computer output. Homework is due on the first day of
class following the assigned week. Students will be expected to present problems in class.
Attendance will be taken during the first 10 minutes of class and late is counted as absent. Students with more than 8 absences
will not receive a passing grade for the course. Attendance records will begin the second week of classes.
Students are encouraged to become student members of AACE, International and attend the meetings on campus.
Research Project
The research project will be to develop materials for an undergraduate on-line engineering economics course. There are seven
areas and teams of 3(2-4) students will work on an approved section. Tese sections are on the last page of the syllabus.
Research Project Schedule Schedule
Jan 22th
Selection of Research Project and Final Team Formation
Feb 5th
Bibliography 10 references minimum, at least 5 from books and give pages of interest, not the total book(2
points)
Feb 21st
Detailed Outline of Research Paper Due(3 points)
March 13th Draft of 1st third of project due(5)
April 8th
Preliminary Draft of Complete Research Paper Due(5)
April 17th
Research Paper Due at start of class- NO LATE PROJECTS
April 22nd Presentations of Projects(20 minutes per group), Course Evaluations
Non-discrimination Statement: I expect to maintain a positive learning environment based upon open communication, mutual
respect, and non-discrimination(race, sex, age, disability, veteran status, religion, sexual orientation, color, or national origin) in
this course. If you anticipate any type of accommodation in order to participate in this class, please make the appropriate
arrangements with Disability Services(293-6700) and advise me of those arrangements. Suggestions for improving the positive
learning environment in this class will be appreciated.
Academic Dishonesty Statement
WVU expects that every member of its academic community shares the historic and traditional commitment to honesty, integrity,
and the search for truth. Students participating in academic dishonesty activities may receive penalties such as an unforgivable F
for the course or a grade of zero. Academic dishonesty is defined to include but is not limited to any of the following:
1. Plagiarism is defined in terms of proscribed acts. Students are expected to understand that such practices constitute
academic regardless of motive. Those who deny deceitful intent, claim not to have known that the act constituted
plagiarism, or maintain what they did was inadvertent are nevertheless subject to penalties when plagiarism has been
confirmed. Plagiarism includes, but is not limited to: submitting, without appropriate acknowledgment, a report,
notebook speech, outline, theme, thesis, dissertation, or other written, visual, or oral material that has been copied in
whole or in part from the work of others, whether such source is published or not, including( but not limited to) another
individual’s academic composition, compilation, or other product, or commercially prepared paper.
2. Cheating and dishonest practices in connection with examinations, papers, and projects, including, but not limited to:
a. Obtaining help from another student during examinations.
b. Knowingly giving help to another student during examinations, taking an examination or doing academic work for
another student, or providing one’s own work for another student to copy and submit as his or her own.
c. The unauthorized use of notes, books or other sources of information during examinations. The unauthorized use of
calculators or computers programmed with formulas, equations, or notes, which have not been approved by the instructor
for your use on the exam.
d. Obtaining without authorization an examination or any part thereof.
3. Forgery, misrepresentation or fraud:
a. Forging or altering, or causing to be altered, the record of any grade in a grade book or other educational record.
b. Use of University documents or instruments of identification with intent to defraud.
c. Presenting false data or intentionally misrepresenting one’s records for admission, registration, or withdrawal from the
University or University course.
d. Knowingly presenting false data or intentionally misrepresenting one’s records for personal gain.
e. Knowingly furnishing the results of research projects or experiments for the inclusions in another’s work without
proper citation.
f. Knowingly furnishing false statements in any University academic proceeding.
IMSE 577 Spring 2008
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Research Papers - Prepare a section for an on-line engineering economics course. Develop materials, example problems, test
problems for evaluation of section and for a Final Examination. Problems are to be set to have multiple inputs and solutions be
calculated automatically.
Sections:
1. Introduction to engineering economy
Basic terms and definitions, why cash flows instead of profits, brief history
Breakeven analysis
Improvement curves
Types of interest, Types of dollars
2. Finance, accounting and engineering economy relationships with respect to cash flows
“t”account
Purcell Diagrams
P&T Statement and Balance Sheet relationships and Purcell Diagram
3. Fundamental Engineering Economic Expressions
Single Cash Flows
U:niform Series
Uniform gradient
Geometric Gradient and Escalation
4. Cash Flows Before Taxes and After Taxes
Cash Flows Before Taxes
Taxes and Depreciation Types
Straight Line
Double Declining Balance
MACRS
Section 179
Production
Sum-of-digits
5. Project Evaluation Techniques
Present Worth
Future Worth
Average Annual Cost
Payback period
Return on Investment
Return on Average Investment
Internal Rate of Return
Modified Rate of Return
6. Special Topics
Benefit Cost Analysis
Replacement Analysis
Incremental Rate of Return
Loan Payments and Interest – sums of interest and principal
Currency Exchanges
Inflation
Buy-Lease considerations
7. Risk , Probability and Earned Value Considerations
Discrete and Continuous Distributions
Mean and Standard Deviations
Normal distribution, triangular distribution
Confidence Limits of Estimates
Schedule Performance Index, Schedule Variance
Cost Performance Index, Cost Variance
Forecasting – Estimate at Completion, (cost estimate, schedule estimate)
Work Progress Measurement
Weekly and Cumulative Performance Measurement
IMSE 577 Spring 2008
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