IMPORTANT ANNOUNCEMENT: FINAL VIDEO ASSIGNMENT & PEER EVALUATION
Course: Engineering Economics (Mechanical Engineering-UET Taxila)
Dear Students,
This semester culminates with a final, comprehensive assignment designed to allow
you to demonstrate your mastery of Engineering Economics principles and your ability
to articulate complex solutions. This is a challenging, capstone-style individual
assignment with a peer evaluation component, and it represents your last and final
opportunity to improve your marks in this course.
Your commitment to professional ethics, honesty, and integrity throughout this process
is paramount.
ASSIGNMENT TASK:
Each student will individually create a video presentation providing logical, detailed,
and well-supported answers to the set of Engineering Economics questions provided
below (Page 5). Your answers must demonstrate a thorough understanding of the
concepts from Leland Blank's "Engineering Economy" (7th Edition) and other relevant
course materials.
VIDEO REQUIREMENTS:
1. Length: The video must be no less than 30 minutes and no longer than 40
minutes. Videos outside this range will be penalized.
2. Content & Structure:
o Introduction: Clearly state your name, student ID, and briefly introduce
the scope of your presentation.
o Question-by-Question Answers: Address each assigned question
systematically.
o Depth & Logic: Provide detailed explanations, showing your thought
process and the logical steps taken to arrive at your answers. Don't just
state facts; explain the "why" and "how."
o Use of Reference Materials: You must take aid from reference materials
(e.g., textbook, notes, academic sources). Cite or show your references
appropriately during your presentation (e.g., mentioning page numbers
from Blank, showing a slide with a definition, etc.).
o Examples: Use examples (from the textbook, or original ones you
develop) to illustrate concepts where appropriate.
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o Visual Aids: You are strongly encouraged to use visual aids (e.g.,
PowerPoint slides, diagrams drawn on a whiteboard/digital tablet,
software demonstrations if applicable) to enhance clarity. Your face
should be visible for at least part of the presentation (e.g., picture-in-
picture or at the start/end).
o Professionalism: Ensure clear audio, good video quality, and a
professional demeanour. Speak clearly and at an appropriate pace.
o Conclusion: Briefly summarize or offer concluding remarks.
3. Individuality: The content of your video must be your own individual work.
GROUP FORMATION & PEER EVALUATION PROCESS:
1. Group Size: Students will operate in groups of 6 members.
o If your existing project group has 6 members, you will continue in that
group for the peer evaluation part.
o Groups with fewer than 6 members will have additional students assigned
by me for evaluation purposes or may be merged to form groups of 6. I will
manage these exceptions.
2. Peer Watching & Evaluation:
o Each student will watch the complete video presentations of all other 5
members within their designated 6-member group.
o After watching all videos, the group members will deliberate to evaluate
each presentation based on the criteria outlined below.
3. Grade Assignment (Peer-Awarded):
o Through group deliberation, your group will assign a final letter grade to
each member's video presentation.
o Crucially, the following grade distribution MUST be adhered to within
each 6-member group:
▪ One student will be awarded an 'A' Grade.
▪ One student will be awarded an 'A-' Grade.
▪ One student will be awarded a 'B+' Grade.
▪ One student will be awarded a 'B' Grade'.
▪ One student will be awarded a 'C+' Grade'.
▪ One student will be awarded a 'D' Grade'.
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▪ Therefore, within any 6-member group, each grade can only be
awarded once.
4. Submission of Grades:
o The group will record these decided grades on a provided Excel Sheet
template.
o This Excel sheet must be signed by all 6 group members, indicating their
agreement with the awarded grades.
o A scanned copy or clear photo of the signed Excel sheet must be
submitted by the group leader (or a designated member).
SUBMISSION GUIDELINES & DEADLINES:
1. Individual Video Submission:
o Each student must upload their video to a reliable platform (e.g.,
OneDrive, ensure link sharing permissions are set correctly so anyone
with the link can view).
o Submit the valid and working video link through the designated MS
Form (link will be provided).
o Deadline for Video Link Submission: May 22, 2025, 11:59 PM. This
deadline is final and will be strictly enforced. Late submissions will not be
accepted.
2. Group Grade Sheet Submission:
o The signed Excel sheet with group-awarded grades must be submitted by
one designated member per group via CR of the concerned section and
uploaded to shared Form link.
o File Naming for Grade Sheet: GroupX_SectionX_Group Leader
Registration [Link] (e.g., Group1_SectionA_22-[Link])
o Deadline for Grade Sheet Submission: May 24, 2025, 11:59 PM.
(Allowing two days post video submission for peer review).
EVALUATION CRITERIA (For Peer and Teacher Evaluation):
Your videos and answers will be judged on the following:
1. Accuracy and Depth of Understanding (40%):
o Correct application of engineering economics principles, formulas, and
methods.
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o Demonstrated deep understanding beyond rote memorization.
o Logical and sound reasoning.
2. Clarity and Quality of Explanation (30%):
o Clear, concise, and articulate explanations.
o Logical flow and organization of thoughts.
o Effective use of examples and visual aids to support explanations.
3. Use and Integration of Reference Material (15%):
o Appropriate and effective use of Leland Blank's textbook and other
relevant sources.
o Proper citation/acknowledgment of sources within the presentation.
4. Professionalism and Presentation Quality (10%):
o Clarity of audio and video.
o Professional demeanour and engagement.
o Adherence to time limits (30-40 minutes).
5. Completeness (5%):
o All assigned questions addressed thoroughly.
ACADEMIC INTEGRITY & PROFESSIONAL ETHICS:
• All submitted video work must be strictly individual. Any form of plagiarism or
collusion on the video content will result in a failing grade for the assignment and
potential further disciplinary action.
• The peer evaluation process requires honesty, fairness, and integrity. Grades
should be awarded based on merit according to the criteria, free from bias or
personal relationships. The signed Excel sheet signifies your collective
professional judgment.
• I reserve the right to review and adjust peer-awarded grades if significant
discrepancies or unfairness are detected. The teacher's decision will be final
after evaluation of your work and the peer-assessment process.
This assignment is a significant undertaking. Plan your time wisely, consult your
resources thoroughly, and aim to produce work that you are proud of. It's an excellent
opportunity to consolidate your learning and showcase your skills.
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Engineering Economics Questions
CLO-1: Express the knowledge and skills to solve the engineering economics
problems by using discounted cash flow method.
(Focus: Understanding the "why" and "how" of time value of money and basic DCF
factors.)
1. Question: Can you explain the fundamental principle behind discounted cash
flow (DCF) methods? Why is it essential in engineering economic analysis?
o (Probing/Follow-up): Why can't we just add up all the costs and revenues
directly without discounting? What role does the interest rate play in this?)
2. Question: Describe a situation where you would use the Present Worth (P/A)
factor. What information would you need to apply it correctly?
o (Probing/Follow-up): What does the 'A' represent in this factor? What if the
cash flows were not uniform – could you still use this factor directly? Why
or why not?)
3. Question: What is the conceptual difference between a nominal interest rate
and an effective interest rate? When is it critical to distinguish between the two in
an engineering economic study?
o (Probing/Follow-up): If a problem states an interest rate compounded
quarterly, how would that affect your calculations if you needed an annual
effective rate?)
4. Question: Imagine you have a single future sum of money that you expect to
receive. Explain the process and the specific interest factor you would use to
determine its equivalent value today.
o (Probing/Follow-up): What is this process called? What are the key
variables influencing the outcome of this calculation?)
5. Question: What is meant by "equivalence" in engineering economics? How does
the concept of equivalence help us compare different cash flow profiles?
o (Probing/Follow-up): Can two cash flow profiles that look very different on
a timeline actually be economically equivalent? How would you
demonstrate that?)
CLO-2: Compute Capital Recovery, NPV, and ROR for mutually exclusive and
independent engineering projects.
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(Focus: Understanding the definition, calculation (conceptual), interpretation, and
application of key decision metrics for different project types.)
1. Question: Define "Capital Recovery" (CR). In what kind of engineering decision-
making scenario would calculating CR be particularly useful?
o (Probing/Follow-up): What components make up the CR cost? How does
the Minimum Acceptable Rate of Return (MARR) influence CR?)
2. Question: Explain what Net Present Value (NPV) represents. If you calculate a
positive NPV for an independent project, what does that signify about its
economic viability?
o (Probing/Follow-up): What is the decision rule for NPV when evaluating
independent projects? How does this change if the projects are mutually
exclusive?)
3. Question: What is the Rate of Return (ROR), often called Internal Rate of Return
(IRR)? How is it conceptually determined, and what is its decision criterion when
compared against a MARR for an independent project?
o (Probing/Follow-up): Can you describe a potential pitfall or complication
when using ROR for project evaluation, especially for non-conventional
cash flows?)
4. Question: Differentiate between "mutually exclusive" projects and
"independent" projects. How does this distinction affect the way you would
select the best project(s) using NPV or ROR analysis?
o (Probing/Follow-up): If you have two mutually exclusive projects with
positive RORs, both above MARR, how do you decide which one to pick
using the ROR method? (Hint: incremental analysis).)
5. Question: If you are asked to evaluate a set of mutually exclusive alternatives,
and you decide to use the Present Worth method, what is the general procedure
you would follow to select the best alternative?
o (Probing/Follow-up): What if the alternatives have different useful lives?
How might you address that to ensure a fair comparison?)
CLO-3: Compare life cycle cost of engineering projects and perform financial
evaluation studies.
(Focus: Understanding LCC, comprehensive financial evaluation beyond just initial
cost, and comparing alternatives with varying characteristics.)
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1. Question: What do we mean by "Life Cycle Cost" (LCC) of an engineering project
or asset? Why is it often a more comprehensive measure than just the initial
purchase price?
o (Probing/Follow-up): Can you name three distinct cost categories
typically included in an LCC analysis?)
2. Question: Imagine you are comparing two alternative designs for a component.
Design A has a lower initial cost but higher expected maintenance costs over its
life. Design B is more expensive upfront but promises lower maintenance.
Outline the steps you would take to perform a financial evaluation to choose the
better design.
o (Probing/Follow-up): What economic metric (e.g., PW, AW, FW) might be
most appropriate here and why? What role does the analysis period
play?)
3. Question: When comparing engineering alternatives that have different useful
lives, what are some common approaches to ensure a fair and equivalent
financial comparison? Briefly describe one such method.
o (Probing/Follow-up): Why is directly comparing the Present Worth of
alternatives with different lives problematic without adjustment?)
4. Question: Beyond pure numerical calculations (like NPV or LCC), what other
qualitative or non-monetary factors might be important to consider when
performing a comprehensive financial evaluation study for an engineering
project?
o (Probing/Follow-up): How might an engineer incorporate these non-
monetary factors into the decision-making process or project
recommendation?)
5. Question: What is a "break-even analysis" in the context of engineering
economics? Describe a scenario where performing such an analysis would be
valuable.
o (Probing/Follow-up): What key variable are you typically solving for in a
break-even analysis involving two alternatives?)
CLO-4: Develop economic solutions for engineering projects in real-world
situation.
(Focus: Applying economic principles to practical scenarios, considering real-world
complexities, and making justified recommendations.)
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1. Question: Your company is considering replacing an old, inefficient machine
with a new, more automated one. Outline the key economic factors and steps
you would consider developing a recommendation for or against this
replacement.
o (Probing/Follow-up): What data would you need to collect? How would
you handle the existing machine's current market value or disposal cost?)
2. Question: In many real-world engineering projects, future costs and benefits are
not known with certainty. How can an engineer acknowledge or begin to address
this uncertainty when developing an economic solution or justification?
o (Probing/Follow-up): Can you name a technique (e.g., sensitivity analysis)
and briefly explain how it helps in dealing with uncertainty?)
3. Question: Imagine you are tasked with selecting the most economical material
for a new product component from several options, each with different initial
costs, processing costs, and expected lifespans. How would you structure your
economic analysis to arrive at a recommendation?
o (Probing/Follow-up): What assumptions might you need to make? How
would MARR influence your choice?)
4. Question: Describe a situation where the "do-nothing" alternative is a valid
option to consider in an engineering economic analysis. How would you evaluate
it against other proposed alternatives?
o (Probing/Follow-up): What cash flows are typically associated with the
"do-nothing" alternative?)
5. Question: As an engineer, you've performed an economic analysis and found
that the most economically attractive option has some negative environmental
or social impacts. How might you approach presenting your findings and
recommendations to management?
o (Probing/Follow-up): What is the engineer's ethical responsibility in such
situations? How can economic analysis tools still be used to inform the
decision, even with non-monetary concerns?)
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