MSCI261 Lecture Notes - Msci, Engineering Economics
9 May 2014
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Document Summary
Engineering economic analysis can be de ned as the economic analysis of costs, bene ts, and revenues occuring over time. This course develops the tools used to solve these problems in an engineering setting. This course will focus speci cally on discrete time nances, which is a simpli ed version of actual nance and does not involve calculus. All money has a time value associated with this. This value represents the returns one could make on an investment of some amount of money at time x versus a potentially di erent amount at time y. For example, when computing the di erence between receiving right now (x) versus. in three years (y), we determine what interest rates we could receive. So for option x, if we can guarantee investment returns of 10%, then in three years we would have + Therefore, x is the better option, despite being a statically lower value.
