Branch: Electrical
Semester: 4th
Subject: Economics for Engineers (3140911)
Topic 1: Engineering Economics, Cost and Estimation
1. Define Economics and Engineering Economics. Also differentiate between microeconomics and macroeconomics.
2. Explain in detail decision making process in engineering economic.
3. Explain with example fix cost, variable cost and marginal cost.
4. Differentiate between
a) cash cost and book cost
b) sunk cost and opportunity cost
5. Define recurring cost, non-recurring cost and incremental cost. 3
6. Discuss various phases in life-cycle of a product or service. Also explain life cycle cost.
7. Define following three types of cost estimates
(a) Order of magnitude estimate
(b) Budget estimate
(c) Definitive estimate
Also list different types of estimation models.
8. Explain in detail following estimation models
a) Cost Index estimation model
b) Power sizing estimation model
9. What is learning curve? Explain its use as estimation model.
10. What is benefit estimation? State major difference between cost estimation and benefit estimation.
Topic 2: Cash Flow, Interest and Equivalence
1. What is cash flow? Explain cash inflows and cashflow with suitable diagram.
2. What are the different categories of cash flow?
3. Explain the time value of money with an example.
4. Why consider return to capital? Explain with suitable example.
5. Explain the difference between simple and compound interest .Which is more common?
6. What are the various methods of debt repayment?
7. Explain nominal interest rate with suitable example.
8. Explain effective interest rate with suitable example.
Topic 3: Cash Flow and Rate of Return Analysis
1. What is Rate of Return (RoR)? Explain with suitable example.
2. What is Internal Rate of Return (IRR)? Explain with suitable example.
3. What are the benefits of cost analysis?
4. Write short notes on
(a) Treatment of Salvage Value
(b) Annual Cash Flow Analysis
(c) Incremental Analysis
(d) Future net worth
(e) Economic analysis in public sector
5. What are the criteria of the best alternative choosing?
6. State and explain sensitive analysis and break even analysis with reference to project
management?
7. Explain in detail Benefit Cost Ratio method for capital project evolution.
Topic 4: Inflation and Price Change
1. What is inflation? Discuss causes of inflation. State major effect of inflation.
2. State important measures that can be taken to control inflation.
3. What is price index? Explain different types of indexes.
4. Differentiate between composite index and commodity index.
Topic 5: Present Worth Analysis
1. What is Present Worth Analysis? Explain its significance From the point of view of solving economic analysis problem explain each of the following –
- End-of-Year Convention
- Viewpoint of Economic Analysis
- Borrowed Money viewpoint
- Effect of inflation and deflation
- Taxes
2. Discuss different economic criteria used for analyzing problem
3. Define following terminologies
- Pay-back period
- Accounting Rate of Return
- Benefit to cost Ratio
- Minimum attractive rate of return