Course Description: Analysis of engineering decisions; principles and methodology of comparing decision alternatives, such as various engineering designs, manufacturing equipment, or industrial projects. Dealing with uncertainty and risk; rational decision making when future outcomes are uncertain. Concepts of time value of money. Effects of depreciation, inflation and taxation on economic decisions, cost benefit analysis of public projects. Replacement analysis.


Instructor Sec. Email Office Tel. Office Hour
Emre Uzun 1,2 EA 328 x3484 By Appointment
Çağla Dursunoğlu 3 EA 324 x3483 By Appointment
Teaching Assistants
Teaching Assistant Sec. Email Office Hour
İdil Budak Dokumacı All By Appointment

 Required Text Book: Park, C. S., Contemporary Engineering Economics, 6th Ed., Prentice Hall, 2016


Midterm:             30%

Final Exam:         40%

Quizzes:               30%   (2 quizzes, 15% each)

*   Reserved 4th hour may be used in some weeks; as this will be announced in the class.

Assignments: Study Sets will be distributed but they are not going to be collected, nor graded. But, it is highly probable that your quiz question will be very similar to the problems in your Study Sets.

Attendance: Attendance will be taken at all lectures. However, attendance will NOT be used for grading. Note that attendance will be taken with student signatures. Any violation of this process (i.e. forging signatures) is a direct violation of academic integrity!

 Makeup Policy: A make-up examination for the midterms will only be given under highly unusual circumstances (such as serious health or family problems). The student should contact the instructor as early as possible and provide the instructor with proper documentation (such as a medical note certified by Bilkent University’s Health Center. There is no make-up for quizzes.

Classroom Policy: Every student is expected to respect the instructor’s right to teach and other students’ right to learn. Any behavior, which distracts or disturbs the other students or the instructor, or disrupts class in any way is unacceptable and will not be tolerated. Any student engaging in inappropriate behavior will be asked to leave. Such behavior might also reflect negatively on the course grade of the student.


Tentative Course Outline

  • 1: Engineering Economic Decisions
  • 3: Time Value of Money
  • 3: Economic Equivalence
  • 3: Interest Formulas – Single Cash Flows
  • 3: Interest Formulas – Equal Payment Series
  • 3: Interest Formulas – Gradient Series
  • 3: Unconventional Equivalence Calculations
  • 4: Nominal and Effective Interest Rates
  • 4: Equivalence Analysis using Effective Interest Rates
  • 4: Debt Management
  • 4: Investing in Financial Assets
  • 5: Payback Period
  • 5: Discounted Cash Flow Analysis
  • 5: Variations of Present Worth Analysis
  • 5: Comparing Mutually Exclusive Alternatives
  • 6: Annual Equivalent Worth Criterion
  • 6: Applying Annual Worth Analysis
  • 7: Rate of Return Analysis
  • 7: Finding RoR
  • 7: Internal Rate of Return Criterion
  • 7: Incremental Analysis
  • 9: Asset Depreciation
  • 9: Depreciation Methods
  • 9: Corporate Income Taxes
  • 10: Developing Project Cash Flows
  • 11: Meaning and Measure of Inflation
  • 11: Equivalence Calculation under Inflation
  • 11: Effects of Inflation of Project Cash Flows
  • 12: Decision Tree Analysis
  • 14: Replacement Analysis Fundamentals
  • 14: Replacement Decision Models
  • 15: Methods of Financing
  • 15: Cost of Capital
  • 15: Choice of MARR
  • 16: Benefit-Cost Ratio

Important: The instructors reserve the right to update any part of this syllabus as necessary. Students will be notified of any changes.