This page was last modified on May 29, 2018 05:34:52am EDT 460 Syllabus

Instructor:

Geza Bottlik, E-mail: bottlik@usc.edu

Office Hours:

TBD (USC office GER202)

 

U.S. Phone 213 – 740 –5050 (office hours only)

TA:

None

TA Office Hours:

By appointment

Class time/place:

Monday – Thursday 11:30 A.M. – 1:30 P.M.

Web Pages: www.gezabottlik.com. and http://blackboard.usc.edu. Lecture notes, assignments, grades and notices will be available there.

 Download pdf

Quiz Schedule:

Weekly:

Usually Thursday, starting Week 2

Last hour of class

The quizzes will be based on problems similar to the ones assigned in the homework and the discussions in class. All quizzes are open book open notes. Students are expected to apply what they should have learned up to that point to analyzing situations, identifying the problems and applying the appropriate techniques to solve them or interpreting computer solutions.

 

Assignments:

Readings and Problems will be included in each week’s assignments. Problems are assigned on Monday and Thursday and are due on the following Wednesday and Sunday at midnight, submitted through the assignment manager on Blackboard and will be returned electronically before the next week if points are deducted. Solutions will be posted after the assignment is due. Reading assignments are due when the material will be covered in class. It is imperative that you prepare for class  -- you will find it extremely difficult to follow the discussion if you have not read the material.

We will not accept late homework. Homework is to be a digital Excel 97 or later file. Do not type results into the spreadsheet – use formulas. The person’s name, assignment number, the date and any one that you worked with must be in the header. Use a consistent template and format the output for a professional appearance. A sample will be available on the web site. File names are generated by blackboard. There may only be one file per homework (no zip files).

The assignments should be as professional in appearance as if you were preparing reports at work or for publication. Clearly label the problem number and your conclusions for each problem, followed by the supporting calculations. The problems must be in the order assigned. Out of sequence problems will receive no credit.

Homework is to be done individually. If you discuss or collaborate on a homework, you must indicate that on your paper. Each person must turn in a separate homework. Do not give your file to anyone, or use someone else’s file. Generated data and essay questions must be unique to each person.  If the answer is given in a book, don’t just copy it, explain how you got it.

 

Objectives and Content

Our objective is to prepare YOU (the student) to consider the economic dimensions of evaluating engineering alternatives.

As in all other aspects of life, as an engineer you must be able to intelligently assess and evaluate choices.  One aspect of that evaluation is economic.  This is an important bridge between engineering and management.  You must be able to "sell" your ideas to management.  At some point in time, most of you will be managers and have to understand this material in great detail.

Economics should never be the sole consideration in any decision, but it is often a major component. By the end of the course, you should be prepared to analyze complex problems and have a sufficient background to perform well on the engineering economics section of the Engineer-in-Training Exam.

The course is divided into three parts.  The first portion of the course concentrates on the basic computational elements critical to providing a quantitative method for economic analysis.  These include the concepts of the time value of money and equivalence.  Specifically, you will cover equivalent present worth, future worth and annual worth.  Also introduced in this section are tools of evaluation such as internal rate of return and net present value.  The second portion of the course BUILDS on the first, and refines the economic model to include the effects of depreciation, taxes, variability and inflation.  Finally, the course will cover project financing, capital budgeting and probabilistic outcomes. 

Specific Goals include:

1.    Understanding the concepts of the time value of money and interest rates

2.    Be able to analyze cash flow series using present worth, annual equivalent worth and internal rate of return methods of assessment.

3.    Be able to develop cash flow sequences that include the effects of taxes, inflation, depreciation, loan principle payments and loan interest payments.

4.    Be able to assess cash flows under risk with varying parameters.                                              

It is up to you to become familiar with and learn the mechanics of the material in the text. We are here to explain things you don’t understand, to add things that are not in the book, and to evaluate whether you can apply the material to real problems. The lecture is a supplement to what is contained in the book.  It is NOT intended to be a duplication of what is contained in the book.

We are looking forward to an intellectually stimulating and rewarding summer with you.

 

Grading (final percentages will depend on the actual number of each item):        

Homework

~30%

30 points

2.5 pts each

Participation

 

~10%

10.8 points

0.4 pt. each, drop 1 lowest

Quizzes

~60%

60 points

10 pts. each

 

Required Text:

Contemporary Engineering Economics 5th Ed. - C. S. Park.  Menlo Park, CA,

Addison Wesley Publishing Company (www.prenhall.com/park or www.eng.auburn.edu/~park/cee.html) You may use older editions if you wish.    


Approximate Course Outline:

Week

Material

Homework No. due

01

Introduction and Organization

 

 

Chapter 1

 

 

Chapter 2 Financial Statements

 

02

Chapter 8 Cost Concepts

1 and 2

 

Chapter 3 Economic Equivalence

 

 

Chapter 4 Money Management

 

03

Chapter 4 Money Management (cont)

Chapter 5 Present Worth Analysis

3 and 4

04

Chapter 6 Annual Equivalent Worth,

5 and 6

 

Chapter 12 Simulation of Present Worth Analysis

 

05

Chapter 7 Rate of Return

7 and 8

 

Chapter 9 Depreciation and Taxes

 

06

Chapter 10 Project Cash Flows

9 and 10

 

Chapter 11 Inflation

 

07

Chapter 13 Public projects

11 and 12

 

Chapter 14 Replacement

 

 

Cost-Benefit Analysis

 

 

 

 

ALWAYS BE SURE TO GIVE THE SOURCE OF ALL YOUR INFORMATION. ANYTHING TAKEN VERBATIM FROM SOMEONE ELSE MUST BE IN QUOTATION MARKS AND REFERENCED. (This includes partial sentences!)

This is intended to be an interactive class and your participation should increase as the semester progresses. Attendance at all classes for the whole class is expected of everyone. Frequent absences will result in a reduction in grade. Punctuality is expected. If you are late, be sure not to disturb the class as you enter.

PLEASE DO NOT BRING FOOD OR DRINKS TO THE CLASS. BEVERAGES IN PLASTIC CONTAINERS ARE OK. NEATNESS, SPELLING, AND GRAMMAR COUNT. THEY ARE AN EXPRESSION OF YOUR COMMITMENT TO DO A GOOD JOB. USE THE TOOLS IN WORD AND EXCEL!

Last, but most important:

Academic Conduct

Plagiarism – presenting someone else’s ideas as your own, either verbatim or recast in your own words – is a serious academic offense with serious consequences.  Please familiarize yourself with the discussion of plagiarism in SCampus in Section 11, Behavior Violating University Standards https://scampus.usc.edu/1100-behavior-violating-university-standards-and-appropriate-sanctionsOther forms of academic dishonesty are equally unacceptable.  See additional information in SCampus and university policies on scientific misconduct, http://policy.usc.edu/scientific-misconduct.

 

Discrimination, sexual assault, and harassment are not tolerated by the university.  You are encouraged to report any incidents to the Office of Equity and Diversityhttp://equity.usc.edu or to the Department of Public Safetyhttp://capsnet.usc.edu/department/department-public-safety/online-forms/contact-us.  This is important for the safety of the whole USC community.  Another member of the university community – such as a friend, classmate, advisor, or faculty member – can help initiate the report, or can initiate the report on behalf of another person.  The Center for Women and Men http://www.usc.edu/student-affairs/cwm/ provides 24/7 confidential support, and the sexual assault resource center webpage http://sarc.usc.edu describes reporting options and other resources.

 

Support Systems

A number of USC’s schools provide support for students who need help with scholarly writing.  Check with your advisor or program staff to find out more.  Students whose primary language is not English should check with the American Language Institute http://dornsife.usc.edu/ali, which sponsors courses and workshops specifically for international graduate students.  The Office of Disability Services and Programs http://sait.usc.edu/academicsupport/centerprograms/dsp/home_index.htmlprovides certification for students with disabilities and helps arrange the relevant accommodations.  If an officially  declared emergency makes travel to campus infeasible, USC Emergency Information http://emergency.usc.eduwill provide safety and other updates, including ways in which instruction will be continued by means of blackboard, teleconferencing, and other technology.