Engineering Economics

Последна измена: March 31, 2023
1. Course Title Engineering Economics
2. Code 4ФЕИТ09Л005
3. Study program ЕЕС,ЕАОИЕ,КСИАР,КХИЕ,ТКИИ
4. Organizer of the study program (unit, institute, department) Faculty of Electrical Engineering and Information Technologies
5. Degree (first, second, third cycle) First cycle
6. Academic year/semester IV/8 7. Number of ECTS credits 6
8. Lecturer D-r Petar Krstevski
9. Course Prerequisites
10. Course Goals (acquired competencies): Gaining knowledge of the basic concepts of economy. Introduction to the principles of time value of money, discounting, loans and other financial instruments. The students will be capable of performing economic assessment of investments and risk analyses.
11. Course Syllabus: Economics as a discipline – the need for studying the basics of economics in the engineering. The concept of microeconomics vs. macroeconomics. The concept of production possibility frontier. Production factors and economic cycle. The concept of investment. Types of investments. Investment projects. Investment cycle. Money – basic concepts of monetary policy. Simple and compound interest rates. Discounting rates. Time perspective of money – present, future and annual equivalent value. Loans. Inflation – term, inflation sequences, leveling factor. Depreciation – term and depreciation schemes. Cashflow. Liquidity. Securities. Cost-benefit analysis. Classification of costs – capital expenditures (CAPEX), operational expenditures (OPEX). Monetization of benefits. Environmental impact of projects. Non-economic benefits of investments. Methods for economic assessment of investments – static, dynamic and stochastic economic assessment. Investment Payback Period. Accounting Rate of Return (ARR). Discounting techniques for assessment – Net Present Value (NPV), Profitability Index (PI), Internal Rate of Return (IRR), Minimal Costs, Annual Equivalent Value. Application of the economic assessment methods on examples in engineering. Risk analysis of investments. Risk and its measurement – determining risk aversion. Investment valuation – basic principles, myths and approaches. Calculation of cost of capital. Capital Asset Price Model (CAPM). Weighted Average Cost of Capital (WACC). Discounted Free Cash Flow (DFCF). Sensitivity analyses.
12. Learning methods: Teaching the theoretical part of the course, exercises on practical examples, interactivity on classes, consultations and homework/project assignments.
13. Total number of course hours 3 + 2 + 0 + 0
14. Distribution of course hours 180
15. Forms of teaching 15.1. Lectures-theoretical teaching 45
15.2. Exercises (laboratory, practice classes), seminars, teamwork 30
16. Other course activities 16.1. Projects, seminar papers 30
16.2. Individual tasks 30
16.3. Homework and self-learning 45
17. Grading 17.1. Exams 0
17.2. Seminar work/project (presentation: written and oral) 10
17.3. Activity and participation 10
17.4. Final exam 80
18. Grading criteria (points) up to 50 points 5 (five) (F)
from 51to 60 points 6 (six) (E)
from 61to 70 points 7 (seven) (D)
from 71to 80 points 8 (eight) (C)
from 81to 90 points 9 (nine) (B)
from 91to 100 points 10 (ten) (A)
19. Conditions for acquiring teacher’s signature and for taking final exam Regular attendance at lectures and exercises
20. Forms of assessment During the semester, there are two mid/end-term partial exams (120 min each). Besides these exams, any student must complete and submit the required homework/project assignments, according to the schedule published at the course web site. For the students that will not be successful at the partial exams there is additional opportunity to do final exam (180 min.).
The final mark is determined from the weighted average of scores from the exams and homework/project assignments.
During the exams, it is not allowed to use any literature in printed or electronic form. Calculators are allowed, but not mobile phones, tablets or similar electronic devices.
21. Language Macedonian and English
22. Method of monitoring of teaching quality Internal evaluation and surveys
23. Literature
23.1. Required Literature
No. Author Title Publisher Year
1 Dubravko Sabolic Intoduction to microeconomics – selected topics – University of Zagreb 2014
2 Hisham Katib Economic evaluation of projects in the Electicity Supply Industry IET, London, United Kingdom 2003
3 D. G. Newnan, T. G. Eschenbach, J. P. Lavelle Engineering Economic Analysis Oxford University Press 2004