Subject Code: 10ME71
Total Hours: 52
IA Marks : 25
Exam Hours : 03
Exam Marks : 100
PART – A
UNIT – 1
Introduction: Engineering Decision-Makers, Engineering and Economics, Problem solving
and Decision making, Intuition and Analysis, Tactics and Strategy. Engineering Economic
Decision, Maze. Law of demand and supply, Law of returns, Interest and Interest factors:
Interest rate, Simple interest, Compound interest, Cash - flow diagrams, Personal loans and
EMI Payment, Exercises and Discussion.
UNIT – 2
Present-Worth Comparisons: Conditions for present worth comparisons, Basic Present
worth comparisons, Present-worth equivalence, Net Presentworth, Assets with unequal lives,
infinite lives, Future-worth comparison, Pay-back comparison, Exercises, Discussions and
UNIT – 3
Equivalent Annual-Worth Comparisons: Equivalent Annual-Worth Comparison methods,
Situations for Equivalent Annual-Worth Comparisons, Consideration of asset life,
Comparison of assets with equal and unequal lives, Use of shrinking fund method, Annuity
contract for guaranteed income, Exercises, Problems.
UNIT – 4
Rate-Of-Return Calculations And Depreciation: Rate of return, Minimum acceptable rate
of return, IRR, IRR misconceptions, Cost of capital concepts. 96 Causes of Depreciation,
Basic methods of computing depreciation charges, Tax concepts, corporate income tax.
PART – B
UNIT – 5
Estimating and Costing: Components of costs such as Direct Material Costs, Direct Labor
Costs, Fixed Over-Heads, Factory cost, Administrative Over-Heads, First cost, Marginal cost,
Selling price, Estimation for simple components.
UNIT – 6
Introduction, Scope Of Finance, Finance Functions: Statements of Financial Information:
Department of Mechanical Engineering, A.C.E, Bangalore