FACULTY OF ENGINEERING SCIENCES AND TECHNOLOGY

DEPARTMENT OF SOFTWARE ENGINEERING

SEN401 – ENGINEERING ECONOMICS
FALL 2025

Instructor

Designation

Department

Office Location

Email

Office Hours

Batch/Intake Fall 2021

Prerequisite(s) Probability and Stattistics

Credit Hours 3+0

Course Objective(s)

The course is designed to provide you the knowledge about how consumers, firms and governments make
decisions that together determine how resources are allocated. An appreciation of economics and the general
workings of the economy have become increasingly necessary to understand government policy-making, the
conduct of businesses, and the enormous changes in economic systems which are occurring throughout the
world. It is also becoming increasingly important in both government and the private sector to have an
understanding of some of the methods used within economics, such as quantitative methods, statistical and
causal inference, and experimental methods

Course Contents

Engineering Economics, Interest Rate and Economic Equivalence, Understanding Money and Its Management,
Present-Worth Analysis, Annual Equivalent-Worth Analysis, Rate-of-Return Analysis, Cost Concepts Relevant to
Decision Making, Depreciation and Corporate Taxes, Developing Project Cash Flows, Project Risk and
Uncertainty, Special Topics in Engineering Economics.

Sustainable Development Goals (SDGs)

Including awareness of specific Sustainable Development Goals (SDGs) is essential in our course, cultivating
comprehension and dedication to tackling critical global issues like SDG 8, which focuses on Decent Work and
Economic Growth.

Course Textbook / Reference Books and Supplementary Reading Material

S No Book Title Author(s)

 FACULTY OF ENGINEERING SCIENCES AND TECHNOLOGY

1. Contemporary Engineering Economics Chan S. Park

2. Engineering Economic Analysis Donald G. Newnan, Jerome P. Lavelle

3. Engineering Economy Leland T. Blank and Anthony Tarquin

Grading Breakup and Policy

Assignments/ Projects/Presentation 15%

Quizzes 10%

Mid Semester Examination 25%

End Semester Examination 50%

Course Learning Outcomes (CLOs)

Apply the appropriate engineering economics analysis method(s) for problem solving i.e. present
CLO 1
worth, annual cost, rate of return, payback, break-even, benefit-cost ratio

Analyze the depreciation of an asset using standard depreciation techniques to assess its impact
CLO 2
on present or future value.

Evaluate the cost effectiveness of individual projects using the methods learnt, draw inferences for
CLO 3
investment decisions, and compare the life cycle cost of multiple projects for sustainability.

CLO/PLO Mapping and Assessment

Level of Teaching CLO Attainment

CLOs Related PLOs
Learning Methods checked in

Quiz-1, Mid Term,

CLO1 PLO-02 – Problem Analysis C3 Instructions
Assignment-1, Exam

Quiz-2, Mid Term,

CLO2 PLO-03 – Design / Development of Solutions C4 Instructions
Assignment-2, Exam

Quiz-3, Mid Term,

CLO3 PLO-07 - Environment and Sustainability C5 Instructions
Assignment-3, Exam

Weekly Course Plan

 FACULTY OF ENGINEERING SCIENCES AND TECHNOLOGY

Week Topics Covered Remarks

Engineering Economics, Role of engineers in business, Economic decisions

1 v/s design decisions, Large scale engineering projects and types of strategic CLO1-PLO2
economic decisions, Fundamental principles of engineering economics
Interest Rate and Economic Equivalence, Interest: The Cost of Money,
2 Economic Equivalence, Development of Formulas for Equivalence CLO1-PLO2
Calculation, Unconventional Equivalence Calculations
Understanding Money and Its Management, Nominal and Effective Interest
CLO1-PLO2
3 Rates, Equivalence Calculations with Effective Interest Rates and with (Assignment # 01)
Continuous Payments
CLO1-PLO2
4 Changing Interest Rates, Debt Management, Investing in Financial Assets (Quiz # 01)
Present-Worth Analysis, Project Cash Flows, Initial Project Screening
5 Methods: payback Screening and Discounted Cash Flow Analysis
CLO1-PLO2

Variations of Present-Worth Analysis, Comparing Mutually Exclusive

6 Alternatives
CLO2-PLO3

Annual Equivalent-Worth Analysis, Annual Equivalent-Worth Criterion,

7 Capital Costs versus Operating Costs
CLO2-PLO3

Applying Annual-Worth Analysis, Life-Cycle Cost Analysis, Design CLO2-PLO3

8 Economics (Assignment # 02)

Mid Term Examination Week

Rate-of-Return Analysis, Rate of Return and Methods of Finding It, Internal

9 Rate-of-Return Criterion, Mutually Exclusive Alternatives
CLO2-PLO3

Cost Concepts Relevant to Decision Making, General Cost Terms;

Classifying Costs for Financial Statements, Cost Classifications for CLO2-PLO3
10 Predicting Cost Behavior, Future Costs for Business Decisions, Estimating (Quiz # 02)
Profit from Production
Depreciation and Corporate Taxes, Asset Depreciation: Economic versus
Accounting, Book and Tax Depreciation Methods (MACRS), Depletion, CLO3-PLO7
11 Income Tax Rate to be used in Economic Analysis, The Need for cash Flow
in Engineering Economic Analysis
Developing Project Cash Flows, Cost-Benefit Estimation for Engineering CLO3-PLO7
12 Projects, Developing Cash Flow Statements (Assignment # 03)

Project Risk and Uncertainty, Origins of Project Risk, Methods of Describing

13 Project Risk: Sensitivity, Break-Even and Scenario Analysis
CLO3-PLO7

Special Topics in Engineering Economics, Replacement Decisions, Capital CLO3-PLO7

14 Budgeting Decisions, Economic Analysis in the Service Sector (Quiz # 02)
 FACULTY OF ENGINEERING SCIENCES AND TECHNOLOGY

15 Project Report Submission and Presentation CLO3-PLO7

Final Examination Week