Overview

Included in Degrees & Certificates

• 379

Prerequisites

• OS4702
• OA4702

Learning Outcomes

Students who successfully complete this course will be able to:

• Define cost economics, aka “an economic analysis (EA)”

• Understand when an EA is required
• Understand when an EA is not required

• Demonstrate proficiency in performing an EA: 

• Step 1: Describe how to prepare a “best” Statement of Objective.
• Step 2: Demonstrate ability in identifying feasible alternatives.
• Step 3: Create Cash Flow Diagrams
  • A representation of inflows (benefits) and outflows (costs). (Chapter 4)

• Steps 4 and 5 Prerequisite: Understand & calculate “economic equivalence.” 
  • Calculate factors to apply to cash flow diagram’s inflows and/or outflows (Chapter 4)
  • Time Value of Money factors account for projected monetary interest on future cash flows
  • Apply factors to respective cash flows to calculate measures of economic equivalence (Chapter 4)
  • Measures of equivalence are Future Single Sum (F), Present Single Sum (P), and Annuity (A)
• Step 4: Select the best criteria (economic measures-of-merit) for evaluating single projects & alternatives.
• Step 5: Analyze and compare feasible alternatives.
  • Apply “equivalence” methods to evaluate single projects (Chapter 5)
  • Apply “equivalence” methods to evaluate mutually exclusive alternatives (Chapter 6)
  • Analyze multi-attributes by incorporating non-monetary attributes (Chapter 14)
• Step 6: Select and present preferred alternative.
  • Show EA results with & without non-monetary attributes to better inform decision-maker (Chapter 14)
  • Include breakeven and sensitivity analyses to better inform decision-maker (Chapter 10)

• By the conclusion of course, understand the role of and apply economic analysis in decision-making.