APEGBC engineering economics exam 2

[fengdubai]

Hi, I am preparing to sit the engineering economics exam in BC coming month and have a hard time preparing for it. The only book APEGBC recommends to study is PRINCIPLES OF ENGINEERING ECONOMIC ANALYSIS written by Szonyi, Fenton, White, Agee and Case (Canadian Edition 1999).

I find it difficult to solve the examples in the book, althoug h some solutions are provided at the end of the book, I sometimes have no clue how to get there.

I would appreciate if someone can suggest other tutorials, reading material that would clarify some of my problems.

Thanks

 

[RDK]

There should be literally hundreds of books on these topics out there. Engineering economics is simply a subset of managerial economics with applications more germane to engineering issues.

Try a bookstore or library at a university or community collage that has some courses on managerial economics and finance. (In Manitoba anyone can get a loan card from the U of M library)

Learn such concepts as economic rate of return and other interest rate issues, learn about breakeven analysis, learn about economic minimum order quantity and the economics of minimization.

If you have time learn about economic variance analysis (labour cost and material cost variances.)

Try talking to a professor or instructor. Most of them would be happy to help out with a specific question on some topic.

Finally if you have any specific questions post them here.





Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[fengdubai]

Thanks Rick, I got myself another book, but still have no clue how to solve the following problem:

A debt of $X is occured at t=0. It is agreed that payments of $5000, $4000, $3000 and $2000 at t=4,5,6 and 7, respectively, will satisfy the debt if 10% compounded per period is the interest rate. Determine the amount of debt, $X.

The result apparently should be $8618.46 but I dont get it.

 

[dicksewerrat]

Well at t=4, you have incurred 4 time frames at i=.1 compounded. figure out what you owe at that time. subtract your payment. add interest for time peroid 4-5, subtract next payment,continue this process set the equation =0 solve it. It will be a real hairy algebraic equation but you went to school to learn these things. But I suppose someone will have areal simple formula for it, too.

Richard A. Cornelius, P.E.

http://WWW.amlinereast.com

 

[francesca]

The Fundamentals of Engineering preparation books will help you with questions like that. They have good explanations and plenty of worked examples. You should be able to pick one up cheaply off eBay in the next couple of weeks as the October takers get their results.

Personally, I find the FE book invaluable as a summary of an undergraduate engineering degree, as well as as a reference. It has been extremely useful to me at grad school this fall. This is the one I have and recommend.

 

[RDK]

Each future payment has to be discounted to present value terms by dividing the amount by the interest rate to the power of the number of periods in the future.

PV= present value

PV= sum all payments expressed in present value terms.

PV=5,000/1.10^4 + 4,000/1.1^5 + 3000/1.2^6 + 2000/1.1^7

PV= 3,415.07+2,483.69 + 1,693.42 + 1,026.63

PV= 8,618.49





Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[fengdubai]

Thanks so much everyone. I finally figured it out...scary to think how long it took me.