This page was last modified on May 20, 2020 05:15:45pm EDT 460 Syllabus


Geza Bottlik, E-mail:

Office Hours:

By appointment


Maximillian Zellner

Class time/place:

Tue/Thu 3:00 P.M. – 6:00 P.M by Zoom invitation

Discussion session

Friday 10:00 A.M. – 10:50 A.M by Zoom invitation

Web Pages: Lecture notes, assignments, grades and notices will be available there, and D2L (https:\\ for emailing, uploading assignments and quizzes and a discussion board.


 Download pdf



Starting 06/02/20

Last hour and a half 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.


Readings and Problems will be included in each week’s assignments. Problems are assigned on Tuesday and are due on the following Monday at midnight, submitted through the assignment manager on D2L 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.
I 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, so keep them very short. 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. Use one sheet per problem.
Homework is to be done individually, unless it is a team assignment. It is OK to work on homework together. 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 or previous homework, 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.
  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, using Excel and VBA            

I am 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.
I am looking forward to an intellectually stimulating and rewarding summer with you.
Grading (final percentages will depend on the actual number of each item): 



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



34.5 points

5.75 pts each



6 points

0.5 pts. each



60 points

12 pts. each


Required Text:
Contemporary Engineering Economics 6th Ed. - C. S. Park.  Menlo Park, CA,
Addison Wesley Publishing Company
ISBN-13: 978-0134105598
ISBN-10: 0134105591

You may use older editions if you wish.


Approximate Course Outline:





Homework No. due


Introduction and Organization





Chapter 1





Chapter 2 Financial Statements


HW01 05/25



Chapter 8 Cost Concepts

Quiz01 06/02




Chapter 3 Economic Equivalence





Chapter 4 Money Management


HW02 06/01



Chapter 4 Money Management (cont)
Chapter 5 Present Worth Analysis

Quiz02 06/9




Chapter 6 Annual Equivalent Worth,

Quiz03 06/16

HW03 06/08



Chapter 12 Simulation of Present Worth  Analysis





Chapter 7 Rate of Return

Quiz04 06/23

HW04 06/15



Chapter 9 Depreciation and Taxes





Chapter 10 Project Cash Flows


HW05 06/22



Chapter 11 Inflation

Quiz05 06/30




Chapter 13 Public projects


HW06 06/29



Chapter 14 Replacement





Cost-Benefit Analysis







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.


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 Part B, Section 11, “Behavior Violating University Standards” Other forms of academic dishonesty are equally unacceptable. See additional information in SCampus and university policies on scientific misconduct,
Support Systems:
Student Counseling Services (SCS) – (213) 740-7711 – 24/7 on call
Free and confidential mental health treatment for students, including short-term psychotherapy, group counseling, stress fitness workshops, and crisis intervention.
National Suicide Prevention Lifeline – 1 (800) 273-8255
Provides free and confidential emotional support to people in suicidal crisis or emotional distress 24 hours a day, 7 days a week.
Relationship and Sexual Violence Prevention Services (RSVP) – (213) 740-4900 – 24/7 on call
Free and confidential therapy services, workshops, and training for situations related to gender-based harm.
Sexual Assault Resource Center
For more information about how to get help or help a survivor, rights, reporting options, and additional resources, visit the website:
Office of Equity and Diversity (OED)/Title IX Compliance – (213) 740-5086 Works with faculty, staff, visitors, applicants, and students around issues of protected class.
Bias Assessment Response and Support
Incidents of bias, hate crimes and microaggressions need to be reported allowing for appropriate investigation and response.
The Office of Disability Services and Programs Provides certification for students with disabilities and helps arrange relevant accommodations.
Student Support and Advocacy – (213) 821-4710
Assists students and families in resolving complex issues adversely affecting their success as a student EX: personal, financial, and academic.
Diversity at USC
Information on events, programs and training, the Diversity Task Force (including representatives for each school), chronology, participation, and various resources for students.
USC Emergency Information
Provides safety and other updates, including ways in which instruction will be continued if an officially declared emergency makes travel to campus infeasible.
USC Department of Public Safety – UPC: (213) 740-4321 – HSC: (323) 442-1000 – 24-hour emergency or to report a crime. Provides overall safety to USC community.