Scientific area: Engineering and Management
Total working hours: 210
Total contact time: 40
This CU aims to provide students with fundamental, theoretical and practical knowledge about engineering economics. This knowledge is acquired by learning about the available sources of financial information and about the study of economic and financial feasibility of investment projects.
As such, it is expected that each student learns to: - Select the evaluation criteria appropriate to the type of investment study (NPV, IRR, Payback Period); - Apply the evaluation criteria for valuation of financial and real investments; - Choose between alternative investments, mutually exclusive, with different time horizons or budgetary constraints.
1. Fundamentals of Financial Calculus: Time dimension, discount and future values; Simple and compound interest; Annuities and perpetuities; Present value and opportunity cost; 2. Financial Planning: Major financial statements; Economic, financial ratios and operational ratios; 3. Criteria for Profitability Analysis of Investment Projects: Net Present Value (NPV); Internal Return Rate (IRR); Other profitability ratios; 4. Choosing among alternative investments: Differential cash flows and replacement investments analysis; Investments analysis with different life cycles; Optimal investment timing and delay option; Budget constraints.
• Soares, J., Fernandes, A., Março, A. E Marques, J. (2006). Avaliação de Projectos de Investimentos na Óptica Empresarial. Edições Sílabo. • Brealey, R., Myers, S. e F. Allen (2007). Princípios de Finanças Empresariais. McGraw-Hill. • Ross, S., Westerfield, R. e Jordan, B. (2005). Corporate Finance Fundamentals. McGraw-Hill.
Evaluation is made on individual basis and it involves the coexistence of two modes: continuous assessment (60%) and
final evaluation (40%). Further information is detailed in the Learning Agreement of the course unit.