ENG M 401 & 620 Section X1
Fundamentals
of Engineering Finance
September 2010 – December 2010
Mondays, Wednesdays,
and Thursdays from 5:00 PM to 5:50 PM
ENGM 620
Seminar Wednesdays 6:00 PM to 8:00 PM
in ETLC 1-003
This Course Home Page is located at:
http://www.ualberta.ca/~mlipsett/ENGM401_620/ENGM401_620.htm
And was last updated on December 2, 2010
This course is now complete.
Frequently Asked
Questions (FAQ), Guide
to Calculations, Examples Directory,
Glossary,
errata
in course text (4th ed.),
Sample
Midterm#1, Sample
Midterm #2, Sample
Midterm#3, General Course
Information, course overview and format,
and course
outline
Other
Topics in Engineering Management, A Suggested Reading List.
If you
have a discrepancy in the marking of Problem 1 of Assignment #8, please contact
your TA. (Please note that in a course, you should show your work for how you
found an answer for a problem, even though Problem 1i) only asked for a yes/no
answer.)
Midterm #2 will be held on Monday
November 8, 2010, in class. Good luck.
Lectures 19, 21, and 22 are not
available as audio files.
For Assignment #7, question 1 iv), the margin of error for equivalence is within $1.
Because of the ambiguity on the
title page of the assignment, students who handed in Project #1 by 5 pm on
Thursday Oct 21, 2010 will not have marks deducted for lateness. Next time
there will not be as much leniency (and there will be very clear instructions
on the due date and time).
Project
#1 has been handed out. Please contact the instructor to pick up a project (one
copy per student). The project is to be done individually. The instructor will respond to questions by
email (but not necessarily instantly!); and responses that provide additional
guidance will be posted on the FAQ.
The
average on midterm #1 was 75.7 %. Marks have been distributed on eclass.
Assignment
#4 is due by 4 pm on Oct 8, 2010 in the marking box outside the Mechanical
Engineering main office (4th floor MECE 4-9, just down the hall).
Oct. 1,
2010: Midterm #1 is on Monday Oct 4, 2010, in class.
In the marking guide for Assignment #3, the correct answer for Problem
1 i) is false, not true. (In the circumstance
described, the unit profit associated with an incremental sale will be higher
than the average unit profit, but the contribution margin is unchanged.)
Sept 23,
2010: Remember to check the FAQ regularly for answers (or at least more
information) to questions posed by other students about course material and the
assignments. Also, the Guide to Calculations has more explanation about how to
do the calculations described in the lectures.
Sept 20, 2010: For Assignment 2 Problem #2, you can add a separate asset account called “equipment” to show the value of the new equipment; and step 9 talks about book value and asks about the cost incurred in making it ($750) or its likely sale price ($2500). Sorry, that is a typo. It should read $850, not $750.
I will
not be available during regular office hours on Wednesday Sept 22nd because of
a PhD examination; but I will be in my office on Wednesday morning and on
Thursday afternoon. I will also respond to emails. You can also contact the TAs
to help answer your questions.
June 21,
2010: Formal announcements made to
the class during lectures may be subsequently posted on the course website.
(links
are to files in pdf format, two slides per page)
Week 1:
Wednesday
Sept. 8, 2010: Lecture #1 Course
Introduction and ENGM
620 Seminar Introduction; Annotated
Lecture 1
Thursday
Sept. 9, 2010: Lecture #2 Engineering,
Business, and Society; Annotated
Lecture 2
Week 2:
Monday
Sept. 13, 2010: Lecture #3 Introduction
to Financial Statements ; Annotated
Lecture 3; Simple
Bookkeeping Example #2
Wednesday
Sept. 15, 2010: Lecture #4 Income
Statements ; Annotated
Lecture 4 and Seminar:
Intro to Cash Flow Statements ; Annotated
Seminar
Thursday
Sept. 16, 2010: Lecture #5
Income
Statements (2); Annotated
Lecture 5
Week 3:
Monday
Sept. 20, 2010: Lecture #6 Income
Statements (3); Annotated
Lecture 6
Wednesday Sept. 22, 2010: Lecture #7 Depreciation (1); Annotated Lecture 7
And Seminar: Some Reflections on Poverty (presented by Peter Flynn)
Thursday Sept. 23, 2010: Lecture #8 Depreciation (2)
Week 4:
Monday
Sept. 27, 2010: Lecture #9 Income
Statements (4); Annotated
Lecture 9
Wednesday
Sept. 29, 2010: No lecture or seminar
Thursday
Sept. 30, 2010: Lecture #10 Balance
Sheets (1); Annotated
Lecture 10 (This lecture includes Midterm preview & tips)
Week 5:
Monday Oct.
4, 2010: Midterm #1 (in class)
Wednesday Oct. 6, 2010: Lecture #11 Balance
Sheets (2) ; Annotated
Lecture 11
Thursday Oct. 7, 2010: Lecture #12 Leverage
Week 6:
Monday Oct.
11, 2010: Statutory
Wednesday Oct. 13, 2010: Lecture #13 Leverage
(2) & Introduction to Sources & Uses of Funds (reposted) ; annotated
version
Thursday
Oct. 14, 2010: Lecture #14 Cash
Flow Statements (reposted); annotated
version with sources & uses example; some
effects of exchange rates
Week 7:
Monday Oct.
18, 2010: Lecture #15 Cash
Flow Statements (2); Annotated
Lecture #15; some
effects of exchange rates - innovative approaches
Wednesday Oct. 20, 2010: Lecture #16 Ratio
Analysis; Annotated
Lecture #16 Project #1 due at start
of class; seminars
Thursday
Oct. 21, 2010: Lecture #17 Ratio Analysis (2); Annotated
Lecture #17
Week 8:
Monday Oct.
25, 2010: Guest lecture: Brad Johns, VP
Moneta Energy Services, Calgary (who will talk on how engineers and
engineering managers add value to technology companies, and how to manage your
own career)
Wednesday Oct. 27, 2010: Lecture #18 Time
Value of Money; Annotated
Lecture 18; seminars
Thursday
Oct. 28, 2010: Lecture #19 Time
Value of Money (2); Annotated
Lecture 19 (lecture presented by Prof John Doucette)
Week 9:
Monday Nov.
1, 2010: Lecture #20 Interest
Calculations, Annotated
Lecture 20
Wednesday Nov. 3, 2010: Lecture #21 Interest
Calculations (2); Annotated
Lecture 21; (audio not available) seminars
Thursday
Nov. 4, 2010: Lecture #22 Interest
Calculations (3) and (brief) midterm preview – Annotated
Lecture 22; (audio not available). Remember to do Sample
Midterm #2!
Week 10:
Monday Nov.
8, 2010: Midterm Exam #2 (in class)
Wednesday Nov. 10, 2010: Lecture #23 Present
Worth Analysis; Annotated
Lecture 23; seminars
Thursday
Nov. 11, 2010: Statutory
Week 11:
Monday Nov.
15, 2010: Lecture #24 Present
Worth Analysis (2); Annotated
Lecture 24 ;
Wednesday Nov. 17, 2010: Lecture #25 Rate
of Return; Annotated
Lecture 25; midterm review; seminars
Thursday
Nov. 18, 2010: Lecture #26 Other
Analysis Techniques; Annotated
Lecture 26
Week 12:
Monday Nov.
22, 2010: Lecture #27 Inflation;
Annotated
Lecture 27
Wednesday Nov. 24, 2010: Project #2
due at the start of class
Lecture #28 After
Tax Cash Flow; Annotated
Lecture 28 ; seminars
Thursday
Nov. 25, 2010: Lecture #29 Sensitivity
Analysis & Uncertainty; Annotated
Lecture 29
Week 13:
Monday Nov.
29, 2010: Lecture #30 Decision
Analysis; Annotated
Lecture 30
Wednesday Dec. 1, 2010: Lecture #31 Valuation;
Annotated
Lecture 31
Thursday
Dec. 2, 2010: Lecture #32 Course
review
Week 14:
Monday Dec.
6, 2010: Midterm Exam #3 (in class)
Wednesday Dec. 8, 2010: Personal
Finance for Engineers (P. Flynn)
(links are to files in pdf format)
Problem numbers refer to the fourth edition of the text.
There
is no specific format for assignment submissions: typed and handwritten are
both acceptable. Neatness counts! (That’s part of being a professional.) If the
TA can not read your writing, or follow the logic of
your solution, then you will likely lose marks. Make sure that you put your
name and student number on your assignment so that you get credit for the work.
Assignments
are due in class. There is an assignment drop box near the Mechanical
Engineering office on the fourth floor of the mechanical Engineering Building.
It is labeled ENGM 401 X1, but it is also for ENGM
620 Section X1.
Please
respect the “48 Hour” rule: do not automatically contact the TA (or instructor)
if your mark is not what you expected. Review the solution guide, and only
contact the TA if there is indeed an issue.
Assignment
#1: Assigned on Sept. 8, 2010, due in class on Sept. 16, 2010
Assignment
#2: Assigned on Sept. 16, 2010, due in class on Sept. 23, 2010
Assignment
#3: Assigned on Sept. 23, 2010, due in class on Sept. 30, 2010
Assignment
#4: Assigned on Sept. 30, 2010, due in class on Oct. 7, 2010 (extension to
4 pm Oct 8/10)
Assignment
#5 Assigned on Oct. 7, 2010, due in class on Oct. 14, 2010, but will be accepted until 4 pm on Fri. Oct.
15 in the marking box outside MECE 4-9. The assignment has been reposted to reflect
the change in due date and a reduced requirement for Problem #3 (you don’t have
to produce the statement of cash flow and comment on the health of the
company).
Assignment
#6: Assigned on Oct. 18, 2010, due in class on Oct. 28, 2010
Assignment
#7: Assigned on Oct. 28, 2010, due in class on Nov. 4, 2010
Assignment
#8: Assigned on Nov. 4, 2010, due in class on Nov. 15, 2010; Due date extended to Thursday Nov. 18/10.
Assignment
#9: Assigned on Nov. 24, 2010, due in class on Dec. 1, 2010
Optional assignment: Course feedback in lieu of a
missed assignment, or to improve one assignment mark (details
found here), must be handed in by the end of class on Dec. 8, 2010 at the
latest.
Project #1:
Will be handed out in class on Oct. 7, 2010, due at the start of class
on Oct. 20, 2010.
Project #1:
Will be handed out in class on Nov. 15, 2010, due at the start of class on Wednesday, Nov. 24, 2010. (this is a change from the original schedule, which was to
have the project due on Nov 22/10)
·
Projects
will only be accepted late due to a documented medical or personal
emergency. A project that is otherwise late will have a penalty:
10%
penalty within first 24 hours of being late (“late” is after 5:10 pm on the
classroom clock, when the TA leaves with the projects),
30%
between 24 and 48 hours late,
60%
penalty between 48 and 72 hours late, and
not accepted
after 72 hours without a justified reason.
Instructor: MG Lipsett,
Department of Mechanical Engineering, Engineering Management Group
Telephone: 780-492-9494
Email:
Michael (dot) Lipsett
(at) ualberta (dot) ca
Office: 5-8J Mechanical
Engineering Building (5th Floor West)
Office Hours: Wednesdays 1:00 p.m.
to 3:00 p.m. (or by appointment)
I can be consulted whenever my office door is open; however,
I may ask that you make an appointment for a later time. Emails will be
answered, but instant response is not guaranteed. Answers to questions
will be posted on the FAQ for the benefit of all. (So please check the FAQ
first; and remember to refresh your browser to get the latest version of the
web page.)
Teaching Assistants:
Enrique Fernandez (for students with surnames A-G). Email: efernand (at) ualberta (dot) ca
Office hours: Wednesdays 1 to 3 pm in MECE
6-27.
Roya Vaghar Anzabi (for students with surnames H-R). Email: vagharan (at) ualberta (dot) ca
Office hours: Mondays 3 to 5 pm in MECE
6-29.
Roberto Gallardo (for students with surnames S-Z). Email: robertog (at) ualberta (dot) ca
Office hours:
Thursdays after 3 pm in MECE 4-37.
Course Text (required):
ENGM 401
Marking Scheme:
Assignments*: 18%
Individual Projects: 12%
Midterm Exam #1: 20%
Midterm Exam #2: 25%
Midterm Exam #3: 25%
ENGM 620 Marking Scheme:
Assignments*: 18%
Individual Projects: 12%
Team Project (seminar): 15%
Midterm Exam #1: 15%
Midterm Exam #2: 20%
Midterm Exam #3: 20%
*Assignments are due
in class and cannot be accepted
after solutions have been distributed. Assignments can be handed in early to
the instructor. There is an assignment drop box near the Mechanical Engineering
office on the fourth floor of the mechanical Engineering Building. It is
labeled ENGM 401 X1, but it is also for ENGM 620 X1.
Re-exam
rule: If a re-exam is
granted, the exam will be comprehensive (i.e., use material from the entire
course as covered in that lecture section) and the exam mark will replace the
combined mark of all midterm exams given in the course. The rest of the term work (projects,
assignments, etc) will contribute to the new grade as before in the same
fraction.
If a
student misses a midterm for a documented and accepted reason (medical or
personal emergency), then other midterm marks will be scaled proportionally to
yield the 70% contribution to the final mark.
Course Overview:
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.
Course
Format:
This course will be lecture
based, primarily using slides in pdf format that will
be made available in advance from the course web-site. These lecture slides are
supplemented with notes for selected discussions, and with in-class spreadsheet
and problem-solving examples. Required reading and other student resources are
contained in the textbook and the course web-site (this site). Formal
announcements made to the class may be subsequently posted on the course
website.
The key difference in ENGM 620 with
respect to ENGM 401 is a greater emphasis on investment analysis for technology
companies. Students in ENGM 620 form small groups to research the financial
valuation of a publicly traded company and its performance in the market. Later
in the course, each group presents their assessment in a formal presentation to
the class during the Wednesday evening time slot.
Other resources available on the web
site include: Frequently
Asked Questions, guide
on how to do the financial calculations , a
glossary of some of the terms used in the course, errata
in course text (4th ed.) , other
topics in engineering management, sample midterms, and other relevant
material such as tools
for skeptical thinking.
All overheads and notes for the
course are subject to copyright. Reproduction for distribution other than for
your personal use is prohibited unless explicit specific permission is granted.
Additional Reading (strictly optional, NOT required):
The outline for the course is located here.
Note:
The University of Alberta is committed to the highest standards of
academic integrity and honesty. Students are expected to be familiar with these
standards regarding academic honesty and to uphold the policies of the
University in this respect. Students are particularly urged to familiarize
themselves with the provisions of the Code of Student Behaviour (online at www.ualberta.ca/secretariat/appeals.htm)
and avoid any behaviour which could potentially result in suspicions of
cheating, plagiarism, misrepresentation of facts and/or participation in an
offence. Academic dishonesty is a serious offence and can result in suspension
or expulsion from the University. Policy about course outlines can be found in
Section 23.4(2) of the University Calendar.
Feedback:
Good managers are committed to effective interactions with the people
they work with. It is critical that there be good lines of communication, not
only for stating expectations but also for accepting feedback on performance.
(Of course, this communication has to go both ways to be effective: the
employee has to trust the manager to accept feedback non-judgmentally.) In this
course, the instructor welcomes constructive feedback (which can be positive or
negative) and any suggestions for improvements to the course. Discussion during
the class can significantly improve the learning experience. If you have a
question for clarification or a relevant comment (or if the instructor has made
an error…), please share it with the class. Feedback can also be submitted to substitute for one missed assignment,
or to improve the mark of a single assignment. Please
refer to the list of topics for feedback found here.