ESM 450

Classes 3 and 4

(I hope you have read the book, Chapters 1 and 2.) First of all, do you have Classes 1 and 2 nailed down? If you can do HW-1 and those class problems from 19 January 2017, you do.  Unsure?  Here’s a link to the Excel workbook with those problems and the solutions on the next page.  Problem 7 was tricky, so here is an explanation.  Here is a link to Example 1 (the Beamer) and Example 2 from that class.  Note we did the problems two ways, one using a simple (but cumbersome) repayment table and two using Excel functions.

HW-2 has eight problems.  If you can do all these, you can be sure you understand the basics.  So, you try the problems, then open the text of HW 2 from Blackboard and see if you come up with one of the answer choices.  If so, you probably have those problems correct.  But if you don’t, here’s what you do.  Click on the movie for that problem, which shows how to do it.

Do that, before you start the homework quiz in Blackboard, and thus you’ll get that problem right.  You don’t need to watch the whole video, just drag the slider to start of the problem you want. 









5, 6, 7






The entire set of problems is in this Excel sheet

Classes 3 and 4 teach us how to compare alternatives using engineering economics – time-value of money computations that you mastered in Chapters 1 and 2.  Other than introducing the NPV function, you have most the skills needed to compare alternatives.  However, here are two slide sets.  The first reviews basic Excel functions and the second explains NPV function.  No narration, the slides should be explanatory. 

Next, here is a homework problem 3-4 that is very instructive.  Here is my narration of the problem  and the spreadsheet for this and the next are here.
Last is another problem that illustrates some important points about EACF and PW.

So, with that, you've been exposed to all the material that would have been presented in Classes 3 and 4.