06ME56-Engineering Economics |
PART – A |
UNIT I |
INTRODUCTION: Engineering Decision-Makers, Engineering and
Economics, Problem solving and Decision making, Intuition and Analysis,
Tactics and Strategy. Engineering Economic Decision, Maze. Law of demand
and supply, Law of returns, Interest and Interest factors: Interest rate, Simple
interest, Compound interest, Cash - flow diagrams, Personal loans and EMIPayment, Exercises and Discussion
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UNIT II |
PRESENT-WORTH COMPARISONS: Conditions for present worth
comparisons, Basic Present worth comparisons, Present-worth equivalence,
Net Present-worth, Assets with unequal lives, infinite lives, Future-worth
comparison, Pay-back comparison, Exercises, Discussions and problems.
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UNIT III |
EQUIVALENT ANNUAL-WORTH COMPARISONS: Equivalent
Annual-Worth Comparison methods, Situations for Equivalent Annual-
Worth Comparisons, Consideration of asset life, Comparison of assets with
equal and unequal lives, Use of shrinking fund method, Annuity contract for
guaranteed income, Exercises, Problems.
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UNIT IV |
RATE-OF-RETURN CALCULATIONS AND DEPRECIATION: Rate
of return, Minimum acceptable rate of return, IRR, IRR misconceptions, Cost
of capital concepts. Causes of Depreciation, Basic methods of computingdepreciation charges, Tax concepts, corporate income tax.
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PART – B |
UNIT V |
Estimating and Costing: Components of costs such as Direct Material
Costs, Direct Labor Costs, Fixed Over-Heads, Factory cost, Administrative
Over-Heads, First cost, Marginal cost, Selling price, Estimation for simplecomponents
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UNIT VI: |
INTRODUCTION, SCOPE OF FINANCE, FINANCE FUNCTIONS: Statements of Financial Information: Introduction, Source of financial
information, Financial statements, Balance sheet, Profit and Loss account,
relation between Balance sheet and Profit and Loss account. Simple
Numericals
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UNIT VII |
FINANCIAL RATIO ANALYSIS: Introduction, Nature of ratio analysis,
Liquidity ratios, Leverage ratios, Activity ratios, Profitability ratios,
Evaluation of a firm's earning power. Comparative statements analysis.
Simple numericals
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UNIT VIII |
FINANCIAL AND PROFIT PLANNING: Introduction, Financial
planning, Profit planning, Objectives of profit planning, Essentials of profit
planning, Budget administration, type of budgets, preparation of budgets,
advantages, problems and dangers of budgeting. Introduction to Bench
Marking of Manufacturing Operation.
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REFERENCE |
TEXT BOOKS: |
1. Engineering Economy, Riggs J.L., , McGraw Hill, 2002
2. Engineering Economy, Thuesen H.G. PHI , 2002
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Reference Books |
1. Engineering Economy, Tarachand, 2000.
2. Industrial Engineering and Management, OP Khanna, Dhanpat
Rai & Sons. 2000
3. Financial Mangement, Prasanna Chandra, TMH, 2004
4. Finacial Management, IM PANDEY, Vikas Publisahing House,
2002
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