## ENG M 401 Financial Management for Engineers **Subject & Number:** ENG M 401 **Title:** Financial Management for Engineers **Course Career** **Units**: 3 **Approved Hours:** 3-0-0 **Fee index:** 8 **Faculty:** [Faculty of Engineering]{.mark} **Department:** Mechanical Engineering **Typically Offered:**either term **[Instructor Name: Stanislav Karapetrovic]{.mark}** ### ### Calendar Description The application of the fundamentals of engineering economics, financial analysis and market assessment to engineering alternatives in the planning, development and ongoing management of industrial enterprises. The course covers the use of engineering, economic, financial and market assessment information in investment and business operation decisions in technology oriented companies. Note: Credit cannot be obtained for more than one of ENGG 310, ENGG 401, ENG M 310, or ENG M 401. ### Asynchronous & synchronous course content delivery Classes will be held during the regularly-scheduled lecture times in person, except on October 6th, 11th and 13th, when related asynchronous recordings will be provided instead. The topics covered in each lecture are provided in the \"Lecture Plan\" on page 4. Lectures, in whole or in part, may be prerecorded. These can include, for example, the lectures corresponding to the dates when Project Synopses, Class Activities or Tests are conducted. The related video files will be provided on E-Class prior to the appropriate lecture time. Lecture Slides and Class Notes will be available asynchronously throughout the duration of the course on E-Class. Additional supporting files, such as Online Learning Tutorials, \"Before and After Lecture Questions\", example spreadsheets, as well as recorded problem solutions and derivations, will be generated throughout the course and provided on E-Class. Assignments and Project Reports are generated asynchronously and are submitted through E-Class. Project Synopses, Class Activities, Tests and the Final Exam are classroom-conducted and synchronous. ### Course Objectives & General Content: To introduce the fundamental concepts and tools of engineering economic analysis. ### ### Learning Outcomes 1. Be familiar with financial terminology 2. Interpret income statements, balance sheets and statements of cash flow 3. Draw and read cash flow diagrams 4. Calculate the net present value of an investment or project 5. Describe the concepts of time value of money and equivalence 6. Calculate values of cash flow at various points in time 7. Evaluate and compare alternative investments of projects ### Textbooks and References: [Mandatory:]{.underline} The textbook \[Park (2023)\] contains course readings. Lecture slides and class notes are posted on the course E-Class page at the beginning of the term. Various learning tools (e.g., video examples, \"before-and-after-lecture questions\" and tutorials) will also be available. Assignment, class activity and project video question answers may be provided on the course E-Class page after the related submission deadlines have passed. Everything taught in the course may be tested. [Recommended:]{.underline} Textbook \[Current\] - Park, C.S. (2023), \"Contemporary Engineering Economics\", 7th edition, Pearson, ISBN 9780137633166. Text \[Canadian edition\] - Park, C.S., Zuo, M.J., Pelot, R. (2012), \"Contemporary Engineering Economics, A Canadian Perspective\", Pearson Canada, Toronto, 3rd Canadian Edition. Reference - Flynn, P. (2009), \"Financial Management for Engineers\", Castle Rock Research Corporation, Edmonton, 4th Edition ### Assessment Details +-------------------+--------------------+-----------------------------+------------+ | **Activity** | **(A)Synchronous** | **Due/Scheduled** | **Weight** | +-------------------+--------------------+-----------------------------+------------+ | > Assignments | | > 4 (best of 5) \@4% each | > 16% | | | | > (as per schedule on p. 9) | | +-------------------+--------------------+-----------------------------+------------+ | > Projects | | > 4 (best of 5) \@4% each | > 16% | | | | > (as per schedule on p. 9) | | +-------------------+--------------------+-----------------------------+------------+ | > Class | | > 2 (best of 3) \@4% each | > 8% | | > Activities | | > (as per schedule on p. | | | | | > 10) | | +-------------------+--------------------+-----------------------------+------------+ | > Tests | | > 1 (best of 2) \@15% (as | > 15% | | | | > per schedule on p. 10) | | +-------------------+--------------------+-----------------------------+------------+ | > Final Exam | | > December 19, 2023; 14:00 | > 45% | | | | > (tentative, to be | | | | | > confirmed by university) | | +===================+====================+=============================+============+ ### ### Course Accreditation Units The current total and individual Accreditation Unit (AU) counts for this course are: ------------------------------------------------------------- Total Math NS ES ED CS ------------- ------------- ------- ------ ------- ---------- 37.8 37.8 ------------------------------------------------------------- ### ### Course Graduate Attributes The Graduate Attributes (GAs) developed in this course are: ------------------------------------------------------------ \# Graduate Attribute Level (I, D, A) ----- ------------------------------------------ ----------- 1 A knowledge base for engineering (KB): 2 Problem analysis (PA): 3 Investigation (IN): 4 Design (DE): I 5 Use of engineering tools (ET): I 6 Individual and team work (TW): 7 Communication skills (CS): 8 Professionalism (PR): 9 Impact of engineering on society and the I environment (IS): 10 Ethics and equity (EE): 11 Economics and project management (EP): A 12 Life-long learning (LL): ------------------------------------------------------------ ### Course Schedule Please note that the scheduling of lectures is tentative. The current schedule is available on E-Class and may be updated after each class, so that you will be able to follow the course progress and coverage. The lecture numbers and topics presented here will remain fixed and will be provided on the first page of each set of lecture slides for reference. +-----------+----------------------------+----------------+-----------------------------+-------------------+ | > Lecture | > Lecture Topic | > Park (2023) | > *[Park et | > *Flynn (2009)* | | > Number | | > | > al.]{.underline} | > | | | | > Section | > [(2012)]{.underline}* | > *Section* | | | | > | > | > | | | | > \[Textbook\] | > *[Section]{.underline}* | > *\[Reference\]* | | | | | > | | | | | | > *[\[Text: Can | | | | | | > ed.\]]{.underline}* | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 0 | > Course Overview. | | | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 1 | > Introduction to | > 1 | *[1]{.underline}* | > *1* | | | > Financial Management. | | | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 2 | > Bookkeeping and | > 2.1 | *[2.1]{.underline}* | > *2* | | | > Accounting. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 3 | > Financial Statements. | > 2.2 | *[2.2]{.underline}* | | +-----------+----------------------------+ | +-------------------+ | 4 | > Income Statement. | | | > *3* | +-----------+----------------------------+ | +-------------------+ | 5 | > Balance Sheet. | | | > *4* | +-----------+----------------------------+ | +-------------------+ | 6 | > Cash Flow Statement. | | | > *5* | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 7 | > Ratio Analysis. | > 2.3 | *[2.3]{.underline}* | > *6* | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 8 | > Time Value of Money. | > 3.1 | *[3.1]{.underline}* | > *7.1-7.2* | +-----------+----------------------------+----------------+-----------------------------+ | | 9 | > Economic Equivalence. | > 3.2 | *[3.2]{.underline}* | | +-----------+----------------------------+----------------+-----------------------------+ | | 10 | > Interest Formulae. | > 3.3 | *[3.3]{.underline}* | | +-----------+----------------------------+----------------+-----------------------------+ | | 11 | > Equivalence | > 3.4 | *[3.4]{.underline}* | | | | > Calculations. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 12 | > Nominal and Effective | > 4.1 | *[4.1]{.underline}* | | | | > Interest Rates. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 13 | > Effective Interest Rate | > 4.2-4.4 | *[4.2-4.4]{.underline}* | | | | > Applications. | | | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 14 | > Loans. | > 4.5.1-4.5.2 | *[4.5.1-4.5.2]{.underline}* | > *A3.3* | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 15 | > Mortgages. | > 4.5.3 | *[4.5.3]{.underline}* | > *-* | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 16 | > Bonds. | > 4.6.3 | *[4.6]{.underline}* | > *-* | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 17 | > Project Screening. | > 5.1-5.2 | *[5.1-5.2]{.underline}* | > 7.3 | +-----------+----------------------------+----------------+-----------------------------+ | | 18 | > Present Worth Analysis. | > 5.3-5.4 | *[5.3-5.4]{.underline}* | | +-----------+----------------------------+----------------+-----------------------------+ | | 19 | > Annual Equivalent Worth | > 6.1-6.3 | *[5.5]{.underline}* | | | | > Analysis. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 20 | > Rate of Return Analysis. | > 7.1 | *[5.6]{.underline}* | | +-----------+----------------------------+----------------+-----------------------------+ | | 21 | > Rate of Return | > 7.2 | *[5.7]{.underline}* | | | | > Applications. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 22 | > Rate of Return | > 7.3 | *[5A]{.underline}* | | | | > Additional Topics. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 23 | > Mutually-Exclusive | > 7.4 | *[6.1-6.2]{.underline}* | | | | > Project Analysis. | | | | +-----------+----------------------------+ +-----------------------------+ | | 24 | > Incremental Analysis. | | *[6.3]{.underline}* | | +-----------+----------------------------+----------------+-----------------------------+ | | 25 | > Analysis Period. | > 5.5 | *[6.4]{.underline}* | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 26 | > Depreciation | > 9.1-9.2 | *[8.1-8.2]{.underline}* | > *3.4.3-3.4.4* | | | > Fundamentals. | | | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 27 | > Book Depreciation. | > 9.3 | *[8.3]{.underline}* | > *A3.2* | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 28 | > Tax Depreciation. | > 9.4 | *[8.4]{.underline}* | > *A7.1* | +-----------+----------------------------+----------------+-----------------------------+ | | 29 | > Corporate Income Tax | > 9.7.1 | *[9.1-9.4]{.underline}* | | | | > Fundamentals. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 30 | > Disposal Tax Effects. | > 9.7.3 | *[9.5]{.underline}* | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 31 | > Project Cash Flows | > 10.1-10.3 | *[10.1-10.3]{.underline}* | > *A7.2* | | | > Fundamentals. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 32 | > After-Tax Cash Flows | > 10.3(1-3) | *[10.3.(1-3)]{.underline}* | | | | > Applications \[1\]. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 33 | > After-Tax Cash Flows | > 10.3(4-5) | *[10.3.(4-6)]{.underline}* | | | | > Applications \[2\]. | | | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 34 | > Sensitivity Analysis. | > 12.2 | *[15.2]{.underline}* | > *7.3* | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 35 | > Replacement Analysis | > 14.1-14.2 | *[11.1-11.2]{.underline}* | > *-* | | | > \[1\]. | | | | +-----------+----------------------------+----------------+-----------------------------+ | | 36 | > Replacement Analysis | > 14.3 | *[11.3]{.underline}* | | | | > \[2\]. | | | | +-----------+----------------------------+----------------+-----------------------------+-------------------+ | 37 | > Course Summary. | | | | +===========+============================+================+=============================+===================+