Principal Instructor

Dr. POH, Kim Leng

Associate Professor

Department of Industrial Systems Engineering & Management

National University of Singapore.

email: pohkimleng@nus.edu.sg | website | facebook

office: E1A-06-10 | phone: 6516 2193

Course Descriptions

TIE2140 (4 units). This course introduces the concept of "the time-value of money" and the effect that it has on financial decisions in engineering and business. It equips the students with a conceptual framework for understanding and evaluating financial investment alternatives which are represented as a set of cash flows over time. Topics covered include cash flow analysis, choice among economic alternatives, effects of depreciation and taxation, replacement analysis, and dealing with risk and uncertainty.

Course Outline

  1. Introduction to Engineering Financial Decision Making and Cost Concepts.
  2. The Time Value of Money.
  3. Financial Analysis of a Single Project.
  4. Financial Decision on Multiple Projects.
  5. Understanding Key Uncertainties in Projects.
  6. Project Risk Analysis.
  7. Financial Analysis with Depreciation & Taxes.
  8. Capital Assets Replacement Analysis.
  9. Basic Cost Estimation Techniques.
  10. Captial Financing.

Learning Outcomes

Upon completion of this course the student will be able to:

  1. Perform cash flow modeling and financial analysis involving the time value of money.
  2. Analyze, compare and select financial investment proposals using appropriate criteria.
  3. Perform after-tax cash flows for capital asset investments under Singapore corporate tax system.
  4. Deal with risk and uncertainty in projects using sensitivity analysis, probabilistic analysis and Monte Carlo simulation.
  5. Perform economic replacement analysis for capital assets.
  6. Perform cost estimation using basic analytical techniques.
  7. Analyze and solve complex problems that require the use of a combination or integration of methods listed above using computing tools and software (c/o group projects).

Assessments

  • Assignments: 10%
  • Mid Term: 20%
  • Group Project: 25%
  • Final Exam: 45%

Group Project

The project aims to provide an opportunity for students to apply the analytical skills and software tools learned in this course to a selected real-world problem. The deliverables are: Mid-term progress report, Final Report, and In-Class Presentation.

Required Readings

References

  1. William G. Sullivan, Elin M. Wicks and C. Patrick Koelling, Engineering Economy, 17e, Pearson, 2020.
  2. Singapore Statures Online, Singapore Income Tax Act (Chapter 134).
  3. Sam Sim and Justin Tan, Singapore Master Tax Guide 2023/24, 42nd ed., Wolters Kluwer.