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Engineering Economics (ENCE 307): Chapter 5 Methods of Economic Analysis Notes 2025
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Methods of Economic Analysis
ENGINEERING ECONOMICS (ENCE 307)
Chapter 5: Methods of Economic Analysis
12 Hours 16 Marks

Methods of Economic Analysis Notes

About this Chapter

This document contains comprehensive notes for Chapter 5: Methods of Economic Analysis. It covers highly weighted exam topics including Capital budgeting, MARR, Equivalent worth (NPV, Annual, Future), Rate of return (IRR, ERR), Payback periods, Benefit-cost analysis, and WACC calculations.

Syllabus: Methods of Economic Analysis

5. Methods of Economic Analysis
12 hours
16 Marks

5.1 Capital budgeting

5.2 Minimum Attractive Rate of Return (MARR)

5.3 Economic analysis of single and multiple projects:

  • 5.3.1 Payback period (Simple and discounted)
  • 5.3.2 Equivalent worth (Net present, annual, future, and capitalized)
  • 5.3.3 Rate of return (Internal and external)
  • 5.3.4 Public Sector economic analysis (Benefit-cost analysis)
  • 5.3.5 Financial and economic analysis

5.4 Weighted Average Cost of Capital (WACC)

5.5 Repeatability assumption and co-terminated assumptions

5.6 Multiple investment project alternatives: Dependent, independent, and contingent.

Notes by Er. Shrutee Karna

Er. Shrutee Karna
Special thanks to Er. Shrutee Karna for providing these valuable notes.
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Disclaimer

Special thanks to Er. Shrutee Karna for providing these valuable notes.

These educational materials are supplementary resources intended to support learning. We have made efforts to ensure accuracy, but students should refer to standard textbooks and consult professors for authoritative guidance. These notes are for reference only.

If you are the author and wish for these notes to be credited differently or removed, please contact us.

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