ENGINEERING ECONOMICS AND COST ANALYSIS CE 2451

CE 2451                      ENGINEERING ECONOMICS AND COST ANALYSIS            

OBJECTIVE

   The main objective of this course is to make the Civil Engineering student know about
      the basic law of economics, how to organise a business, the financial aspects related to
      business, different methods of appraisal of projects and pricing techniques. At the end of
      this course the student shall have the knowledge of how to start a construction business,
      how to get finances, how to account, how to price and bid and how to assess the health
      of a project.

UNIT I             BASIC ECONOMICS                                                                                             7

Definition  of  economics -  nature  and  scope  of  economic  science  -  nature  and  scope  of

managerial economics - basic terms and concepts - goods - utility - value - wealth - factors of
production - land - its peculiarities - labour - economies of large and small scale - consumption -
wants  -  its  characteristics  and  classification -  law  of  diminishing  marginal  utility -  relation

between economic decision and technical decision.

UNIT II            DEMAND AND SCHEDULE                                                                                  8

Demand - demand schedule - demand curve - law of demand - elasticity of demand - types of
elasticity - factors determining elasticity  - measurement  - its significance  - supply  - supply
schedule - supply curve - law of supply - elasticity of supply - time element in the determination
of  value -  market  price  and  normal  price  - perfect  competition - monopoly  - monopolistic

competition.

UNIT III           ORGANISATION                                                                                                   8

Forms of business - proprietorship - partnership - joint stock company - cooperative organisation - state enterprise - mixed economy - money and banking - banking   - kinds - commercial banks -
central banking functions - control of credit - monetary policy - credit instrument.

UNIT IV           FINANCING                                                                                                           9

Types of financing - Short term borrowing - Long term borrowing - Internal generation of funds -
External  commercial  borrowings -  Assistance  from  government  budgeting  support  and

international finance corporations - analysis of financial statement - Balance Sheet - Profit and Loss account - Funds flow statement.

UNIT V             COST AND BREAK EVEN ANALYSES                                                           13

Types of costing - traditional costing approach - activity base costing - Fixed Cost - variable cost - marginal cost - cost output relationship in the short run and in long run - pricing practice - full cost pricing - marginal cost pricing - going rate pricing - bid pricing - pricing for a rate of return - appraising project profitability -internal rate of return - pay back period - net present value  - cost benefit analysis  - feasibility reports  - appraisal process  - technical feasibilityeconomic feasibility - financial feasibility. Break even analysis -     basic assumptions - break even chart - managerial uses of break even analysis.

TOTAL: 45 PERIODS

TEXT BOOKS

1.  Dewett K.K. & Varma J.D., Elementary Economic Theory, S Chand & Co., 2006

2.  Sharma JC “Construction Management and Accounts” Satya Prakashan, New Delhi.

REFERENCES

1.    Barthwal R.R., Industrial Economics - An Introductory Text Book, New Age

2.    Jhingan M.L., Micro Economic Theory, Konark

3.  Samuelson P.A., Economics - An Introductory Analysis, McGraw-Hill

4.  Adhikary M., Managerial Economics

5.  Khan MY and Jain PK “Financial Management” McGraw-Hill Publishing Co., Ltd

6.  Varshney RL and Maheshwary KL “ Managerial Economics” S Chand and Co