CE2451 ENGINEERING ECONOMICS AND COST ANALYSIS Syllabus

CE2451 ENGINEERING ECONOMICS AND COST ANALYSIS

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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