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The course aims to provide a general introduction to fundamental concepts of financial accounting and economic analysis for engineering and managerial decision making. The goal is to teach techniques for evaluating the worth of investment alternatives. The course also aims to teach methods to support engineering economic decisions as well as the replacement decisions incorporating depreciation, income taxes and inflation factors.
Basics of financial accounting. An overview of the financial reporting systems. Introduction to cost accounting. Definition of costs. Cost classifications and flows. Cost analysis. Engineering economic decisions. Interest. Time value of money. Techniques for evaluating the worth of investment opportunities. Depreciation. Income taxes. Inflation and economic analysis. Replacement decisions.
Upon succesful completion of this course, a student will be able to
1. Apply the basic concepts in financial accounting and financial reporting systems. [a2,b2] [B3]
2. Use fundamental cost concepts and costing techniques for engineering and managerial decision making. [a2] [B3]
3. Describe time value of money and economic equivalence. [b2] [B1]
4. Apply the techniques for evaluating the worth of investment alternatives, project proposals and design choices.[b2, e] [B3]
5. Analyze the effects of depreciation, inflation, tax and accounting concepts on engineering economic decisions. [a2] [B4]
6. Apply the techniques for replacement decisions. [e] [B3]