Course Info
Course materials are available at FESB MERLIN.
Course Objectives
Training students to:
- Acquire basic knowledge in engineering economics with an understanding of the concept of the time value of money,
- Prepare project cost estimates CAPEX/OPEX,
- Prepare economic and financial analyses of investment projects,
- Develop computer models for business decision-making,
- Evaluate projects and investment decisions.
Course content
- Introduction – Basics of Engineering Economics
- Basic Cost Theory
- Time Value of Money (Part 1 - Theory)
- Time Value of Money (Part 1 - Example)
- Methods for Calculating Investment Profitability (Part 1 – Theory)
- Methods for Calculating Investment Profitability (Part 1 – Example)
- Comparison of Alternatives
- Equipment Replacement Analysis
- Example: Compensation for Reactive Power
- Tariff Systems (Part 1 – Theory, Example 1)
- Tariff Systems (Part 2 – Example)
- Tariff Systems (Part 3 – Example 3)
- Sensitivity Analysis and Risk Analysis
- Tax System, Equipment Depreciation
- Decision-Making Models, Contracting, Cost Estimation
List of laboratory or design exercises
- Electricity Consumption Calculation
- Cost Analysis Example
- Compound Interest Calculation, Part 1
- Compound Interest Calculation, Part 2
- Loan Repayment Model
- Developing an Investment Profitability Calculation Model
- Example - Profitability Calculation for Wind Power Construction
- Alternative Analysis, Example on Transformer Selection Model
- Replacement Analysis, Example on the Profitability Model for Replacing Low Voltage Power Lines
- Example – Techno-Economic Model for Reactive Power Compensation Sizing
- Cost Calculation Model for Industrial Electricity Consumer
- Profitability Analysis Model for Using Own Generator
- Sensitivity Analysis and Risk Analysis Model
- Investment Profitability Analysis Model Considering Depreciation
- Preparation of a Cost Estimate
Course Literature
- Goić, R., “Lectures on Engineering Economics”, University of Split, FESB, Split, 2014.
- W.G. Sullivan, J.A. Bontadelli, E.M. Wicks: Engineering economy, Prentice Hall, 1999.