GE1451 – ENGINEERING ECONOMICS AND COST ANALYSIS

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GE1451  –   ENGINEERING ECONOMICS AND COST ANALYSIS
  
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UNIT I           BASIC ECONOMICS                                     15 
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 – 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 II          ORGANISATION                                              7 
Introduction  –  Principle  of  organisation  –  Organisation  chart  –  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 III        FINANCING                                                                                              8
Financial  Management  –  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 IV         COST ANALYSIS                                  9                              
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 feasibility- Economic feasibility – Financial feasibility.

UNIT V          BREAK EVEN ANALYSIS                              6                              
Introduction – Break even point and break even chart – P/V ratio – Managerial uses of
break even analysis. 
                       
     Total: 45 


TEXT BOOKS
1.        Dewett, K.K. and Varma, J.D., “Elementary Economic Theory”, S Chand, 2006.
2.        Sharma, J.C., “Construction Management and Accounts” Satya Prakashan, 1994.

REFERENCES
1.         Barthwal, R.R., “Industrial Economics - An Introductory Text Book”, New Age
International (P) Ltd., 2007. 
2.         Jhingan, M.L., “Micro Economic Theory”, Konark Pvt.Ltd, 1987.
3.        Khan,  M.Y.  and  Jain,  P.K.,  “Financial  Management”,  McGraw-Hill  Publishing
Co., Ltd, 2004. 
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