The need of engineering economy is primarily motivated by the fact that everything in engineering has to be carried out economically and optimally – whether designing an equipment, choosing between alternatives, operating a plant, marketing a product or maintaining a plant, all of which involve a decision-making process. The decision-making process involves the fundamental elements of cash flows of money, time, and interest rates. This course introduces the basic concepts and terminology necessary for an engineer to combine these three essential elements to solve problems that will lead to better decisions. The formulas and techniques used in engineering economics are equally useful in business and for individuals since they are applicable to all types of money matters. In this course you will find the fundamentals of engineering economics explained with video lectures, and many examples that are carefully selected are given and explained to let you practice and understand the concepts very well. This course involves the following three sections:
1- Foundations of Engineering Economy
In this section, you will learn about engineering economics and its role in decision making. Also, you will learn about cash flow diagrams, interest and interest rate, simple interest, and compound interest.
2- Factors: How Time and Interest Affect Money
In this section, you will learn about cash flows that occur in many configurations and amounts—isolated single values, series that are uniform, and series that increase or decrease by constant amounts or constant percentages.
3- Nominal and Effective Interest Rates
In this section, you will learn about interest rates that are compounded more frequently than once a year such as semiannually, quarterly, and monthly. This requires the introduction of two new terms— nominal and effective interest rates. This section explains how to understand and use nominal and effective interest rates. Equivalence calculations for any compounding frequency in combination with any cash flow frequency are presented.
After completing this course, you will be able to understand and work problems that account for the time value of money, cash flows occurring at different times with different amounts, and equivalence at different interest rates. The techniques you master here form the basis of how an engineer in any discipline can take economic value into account in virtually any project environment.
What are you waiting for?
See you in the first lecture!